The last time I analyzed this company was September 2021 (article can be found here), it was close to completing the cycle from the 2020 low, and then pulling back in a larger degree correction. Before I get into the charts, lets check out the company profile again:
“Matador Resources Company is an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with an emphasis on oil and natural gas shale and other unconventional plays. Our current operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. We also operate in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana.”
This stock has been acting very technical, and has been counting Elliott Waves very clean. Lets take a look at the previous Elliottwave September 2021:
Matador Resources Elliottwave View September 2021:
I had noted in the previous article, that the stock was in the final swings before possible pulling back in a larger cycle from 2020 low. The 41.31 to 46.39 was the area I was noting, that can possible produce a peak before a larger pullback. Lets take a look at the current Data:
Matador Resources Elliottwave View December 2021:
Prices acted as anticpated. They rallied into the 1.236 to 1.618 fib area where a peak could happen. In the end, the stock peaked a little above the 1.618 at a high of 47.23. From there, the stock has been fairly choppy, and it is favoured to have already set a 3 waves lower. ((W)) is favoured set, with a bounce into the connector ((X)) already in place. Right now prices are in the middle area, an area that we consider a no trade zone. We only like trading the extreme (blue box) areas where proper risk mangement is clear and defined. A violation of 33.82 ((W)) low will confirm the next leg lower is underway. Until then, it can’t be ruled out that another rally higher into ((X)) is possible before again turning lower.
In conclusion, there is a blue box at 28.28 to 19.96 where buyers may enter for a bounce in 3 waves at least. We don’t prefer selling short this stock, but the blue box can provide a hedge trade opportunity where a bounce can happen.
Risk Management
Using proper risk management is absolutely essential when trading or investing in a volatile stocks. Elliott Wave counts can evolve quickly, be sure to have your stops in and define your risk when trading.
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