Ensco Chart is Looking Strong

 | May 22, 2018 | 1:53 PM EDT
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Ensco (ESV) may not have the best fundamentals and balance sheet, but the chart has improved significantly in recent months. Let's check it out, but please kick the fundamental tires before entering a trade. (For more detail on the energy industry, see Jim Cramer's take here.)

In this daily bar chart of ESV, below, we can see that prices rallied back up to their January highs. The 50-day moving average is rising and is just now crossing above the rising 200-day average line for what is commonly called a golden cross. The daily On-Balance-Volume (OBV) light moved up from September to January and corrected until late March when another rising trend started. A rising OBV line tells us that buyers of ESV have been more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed above the zero line in April for an outright go long signal which is still operational.

In this weekly bar chart of ESV, below, we can see the chart improving from last June. Prices are now above the rising 40-week moving average line. The weekly OBV line is moving up from June and the weekly MACD is crossing the zero line for a big signal on this longer time frame.

In this Point and Figure chart of ESV, below, we can see a long-term decline in the price of the stock. Despite the decline an upside price target of $12.75 is being indicated.

Bottom line: The energy sector is strong. I have been finding many upside breakouts this morning. ESV is poised to break above its January peak and continue higher. Do your research and then only then you could go long ESV. Risk below $6.50 looking for gains to the $12-$13 area.

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