The most common theme you will read about at Trading Tips is the benefits of buying weakness and selling strength. This is the exact opposite of what new traders do because it doesn’t feel good. In fact, sometimes, it’s downright scary to buy weakness. However, when it comes to short term stock picks, buying weakness makes tremendous sense.

The primary issue with buying weakness is that no one really knows how low a stock price will go before it starts heading higher. The best way to avoid buying a stock that is still dropping is to wait for shares to find a bottom and either consolidate there or start to bounce higher.

Wealthpire’s premium short term stock pick premium advisory Buy Today Sell Tomorrow recently identified a winning stock that whose price had built a solid base at the lows. The stock was PDC Energy (Nasdaq:PDCE). 

The advisory suggested a buy  at between $41.05 – $41.20 per share. The stock hit an intra-day high of $42.63 a share resulting in huge gains of at least +3.85%. Congratulations if you took the trade!

Here’s what the advisory reported. At the beginning of the year, it seemed like almost every publicly-traded oil and gas stock known to man experienced at least a few days of eye-catching price runs with the skyrocketing price of crude. Most of those have come back to Earth, but there seems to be a re-emergence of some of those names with crude stabilizing near the $77.00 per barrel level. PDC Energy, Inc. (PDCE) is one of those companies.

Technically, PDCE is trading below its 50 and 200 day moving average. However, RSI, Stochastics and the MACD are indicating a rise in price action due to the oversold nature of the stock. Traders will be looking for PDCE shares to trade higher as long as the stock is above support at $40.45 a share.

If the stock holds above support, then PDCE will likely climb to at least $45.00 a share where there is some short term resistance. Most investors will use a stop that sits right below some near-term support at $39.30 a share for downside protection. At this time, I am targeting $45.00 a share as an excellent spot to book gains on PDCE.

Action to Take:

Enjoy you profits!