The stars are aligning for Devon Energy Corporation ($DVN), as major technical factors indicate that this stock is ready to rally. I’ve got three reasons to buy $DVN. Take a look..
1. Bullish DPZ
The stock dropped into a Double Pivot Hot Zone (DPZ) in the $59.50 area and immediately saw buying pressure enter the market at this zone, which led to a late-day reversal and rally during today’s market.
The double-pivot combo of L4 and S1 is already proving to be a sound source of support, which could lead to a big bounce ahead.
You’ll notice that price dropped down from a bearish DPZ earlier in the month, so there is already evidence that price is honoring these key pivot levels.
2. Visual Support
The fact that the DPZ coincides with a clearly-defined area of support at $59 adds fuel to the fire. This support level is a huge 13-month line, which provides a solid foundation for this stock.
Why is this confluence powerful? You see, when these two types of support levels line up together, more types of traders begin to enter the market expecting a rally, as pivot-based traders and traditional technicians see support. Therefore, more money is being put to work at this zone.
This powerful combo could easily spark key strength ahead for this issue.
3. Bullish Hammer
Not only is there a major confluence of support, but there is already evidence that market participants are entering the market, as illustrated by the bullish hammer candlestick, which has beautifully developed.
This candlestick, along with pivot-based and visual support, provides the protein needed for a rally. It doesn’t usually line up this nicely, but when it does, a swift reaction can occur.
To confirm this move, you’d like to see a close above today’s high price of $60.61, with targets ranging from $64 to $66.
Let’s see what happens!
Cheers!
Frank Ochoa
PivotBoss.com
Follow Frank on Twitter: http://twitter.com/PivotBoss