Energy company Williams Cos. (WMB) is weaker in the pre-market Tuesday but the longer-term chart of WMB remains bullish and I would view short-term weakness as an opportunity to add to existing longs.
In this one-year daily chart of WMB, below, we do not yet see the approximate $3 weakness in early trading. Prices would be trading below the 50-day moving average line and testing the late November and mid-December lows. If you are a very short-term trader you may be very nervous about your position depending on your cost basis. While I can't make that sick feeling go away, I can take a look at the indicators through Monday's close.
Prices for WMB traded around $30 since early September and crossed the rising 50-day moving average line several times. The daily On-Balance-Volume (OBV) line moved sideways until early December when it softened slightly. Momentum is not showing any major bearish divergences.
In this three-year weekly chart of WMB, below, we can see the price action through Monday. Prices are comfortably above the rising 40-week moving average line. The weekly OBV line is very bullish and shows aggressive accumulation the past year. The Moving Average Convergence Divergence (MACD) oscillator is above zero, which is bullish, but the two moving averages that make up the indicator are right on top of each other. Price weakness is likely to generate a liquidate longs sell signal and price strength a renewed buy signal.
Bottom line: With no top pattern visible before the price weakness this morning I lean to the bull side. Sure, prices can start a decline with no warning but I don't believe that is the case for WMB. We should know quickly if prices stabilize in early trading and trim the early losses.