UPL Ultra Petroleum Daily Chart Cup and Handle Pattern Ascending Triangle

UPL is an attractive play in the oil and gas sector. Note the downward move from last year that ended with price forming a basin, the bottom of the cup. Then in July a handle formed which highlights 23 as the breakout line for the stock. The thick red lines clearly identify the cup and handle (C&H). Price keeps bumping its head against 23 but should punch thru at any time.  The indicators are hinting at a sideways vibe moving forward so another handle or two may form as price musters up the strength to punch up thru and breakout.  The C&H targets 28-ish which is an attractive area from a S/R standpoint.

The green lines show the positive divergence that bounced UPL off the bottom in June.  The 200-day MA is sloping down which is a major bear indication for any ticker, but, considering the ongoing chart set-up, watch for the 200 to flatten and slope positively again, if you see that, the stock has lots of upside ahead.  The 20-day moving above the 50-day is a bullish signal.  Watch that relationship moving forward.  The current price action favors an ascending triangle, which is bullish, with a base line at the 23 level as well. The triangle targets 25-ish, another clear level of S/R over the last year. Watch the price action in relation to the support provided by the 50-day MA at 21.62. It is all blue skies for UPL bulls as long as price stays above the 50-day.

Projection is some sideways moving forward but a breakout for the C&H and ascending triangle is on tap targeting 25-ish first, then 28-ish in the weeks and months ahead, these targets likely hitting in early 2013. Thus, UPL is more of a short to intermediate term type play.  For textbook C&H's, such as this, the potential entries are on the breakout at 23 plus, then price will typically peak and come back for a back kiss, which would be an addition point, then when price moves up and takes out the level from the breakout, that provides a third entry point where the bus should be loaded and riding along the road to 28. Also use the bracket of the 200-day MA above and 50-day MA below as a key indicator of direction. Chart would have to be reassessed if price falls thru the 50-day MA. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.