Energy Transfer Partners (ETP) has scalloped around the past six months making a bullish consolidation pattern since August.
With our favorite indicators in a bullish configuration the past two months, it looks like ETP will attempt to break out above its August highs. Let's visit with a few indicators.
In this daily bar chart of ETP, above, we can see how prices peaked in early August and slowly declined to bottom out in November/December and then firm back up toward the August zenith. ETP is above the rising 50-day and 200-day moving average lines. In the first half of the bottom pattern, prices were below the declining 50-day average. In the left-hand side or the earlier half of the pattern, the volume was relatively light but it has increased since November. The On-Balance-Volume (OBV) line has responded on the upside since early December signaling a more aggressive buying pattern that hasn't seen earlier. The Moving Average Convergence Divergence (MACD) oscillator gave cover-shorts signals in November and December and an outright go-long signal in January.
In this three-year weekly chart of ETP, above, we can see prices for ETP are above the rising 40-week moving average line after crossing above and below it a few times the past year. The weekly OBV line has turned up the past couple of months and the MACD oscillator looks like it can cross above the zero line for an outright go-long signal.
Bottom line: Anticipating an eventual upside breakout, aggressive traders could buy strength. Go long ETP on a close above $41 and add on a close above $42. A close below $36 puts the bears in control.