Range Resources (RRC) Shows Multitimeframe Bullish Setup, Says Frank Cappelleri

Turning to the weekly chart, RRC has been trading in an upward-sloping channel going back to late 2022. Along the way, the stock has been marked by a series of higher highs and higher lows. While the advances haven’t always produced strong extensions, each of the biggest moves higher began following a period of corrective price action. Importantly, the largest pullbacks have repeatedly stopped near the lower boundary of the channel, represented by the upward-sloping trendline.

As indicated by the blue arrows, four prior tests of this area led to strong advances lasting multiple months before RRC became short-term overheated and eventually paused. That process may be beginning once again, with RRC now just a few weeks into its current bounce. If the pattern holds once more, the stock before reaching the upper boundary of the channel. By that point, the upper trendline would most likely be above the $50 zone, which would also put RRC above its current, shorter-term $46-upside pattern target.

RRC is a component of the SPDR S & P Oil & Gas Exploration & Production ETF (XOP), and the ETF itself is providing another potentially important technical tailwind. Over the last several months, XOP has been attempting to break out from a 10-year-plus bullish inverse head-and-shoulders base. From that perspective, the recent comeback in energy represents only a small portion of what could become a much larger move following one of the longest technical bases among major ETFs. There is also relatively little overhead resistance above current levels from this longer-term perspective, which complements the constructive setups we’re seeing on RRC’s daily and weekly charts.

Lastly, the weekly relative chart of RRC versus XOP adds another layer to the setup. RRC has underperformed XOP for the better part of the last 18 months, with the ratio producing a consistent series of lower highs and lower lows. However, it is now testing an uptrend line extending back to 2021 and recently grazed weekly oversold territory. The setup resembles what occurred in late 2022. At that point, the relative ratio soon made an important low before eventually advancing to new highs.

The bottom line is that several key technical factors are now lining up for RRC across multiple time frames. The daily chart has formed a potential bullish inverse head-and-shoulders pattern near important support. The weekly chart shows RRC bouncing once again from the lower boundary of its multi-year rising channel. At the same time, the stock’s relative performance versus XOP may be approaching an important turning point. Meanwhile, XOP itself is attempting to break out from a 10-year-plus technical base. Taken together, the individual stock, sector and relative-strength perspectives are all moving toward a potentially important technical inflection point for RRC.

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