Camber Energy, Inc (NYSE: CEI) was trading about 3% lower at the market open on Thursday after rising over 3% on Wednesday.
The oil and natural gas producer has been trading in a sideways pattern to consolidate a 60% surge between April 13 and April 18, which has settled the stock into a bull flag pattern that Benzinga called out on April 18, before the pattern had fully developed.
The energy sector has experienced heightened volatility due to recent geopolitical events, with the Russia-Ukraine crisis and the political instability in Libya threatening global oil shortages.
Camber Energy is also followed closely by retail traders due to the underlying statistics that make the stock a good candidate for a short squeeze. As of March 31, 33.23 million shares, meaning 9.23% of Camber Energy’s small 23.43 million share float were held short. The number is down slightly from the 37.01 million shares that were held short the month prior.
From a purely technical perspective, regardless of the fundamentals, Camber Energy looks set to surge higher due to the bullish indicators that have begun to confirm on the daily chart.
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The Camber Energy Chart: Camber Energy’s consolidation within the flag of the bull flag pattern has been taking place above the 200-day simple moving average (SMA), which indicates the stock is currently trading in a bull market. If Camber Energy is able to break up from the bull flag pattern after the consolidation is completed and rise higher, the 50-day SMA will eventually cross above the 200-day, which will cause a golden cross to occur.
The measured move of a breakup from the bull flag pattern is equal to the length of the pole, which indicates Camber Energy could rise up toward the $1.50 level. Bullish traders and investors who aren’t already in a position can watch for the stock to rise up over the upper descending trendline of the flag on higher-than-average volume for a possibly entry.
Despite trading in a fairly tight range on Wednesday, Camber Energy formed a doji candlestick on higher-than average volume, which indicates there is a current battle taking place between the bulls and the bears. On Wednesday, 59.56 million shares exchanged hands compared to the 10-day average of 48.19 million.
See Also: How to Read Candlestick Charts for Beginners
Camber Energy is trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day, both of which are bullish indicators. The relative strength index is currently measuring in at about 60%, indicating the stock has room to rise up further before entering into oversold territory.
- Bulls want to see big bullish volume come in and break Camber Energy up through the flag formation. There is resistance above at $1.19 and $1.36.
- Bears want to see big bearish volume come in and break Camber Energy down below the eight-day EMA, which will negate the bull flag pattern and set the stock into a downtrend. Camber Energy has support below at $1 and 85 cents.
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