Encana Corp. (ECA) looks poised to begin another move to the upside soon. Prices made a low in early 2016 and rallied to around $14 but have been confined to a sideways consolidation pattern since early 2017. Strength in the indicators suggests the energy producer is ready to head higher. Let's check out the latest charts and indicators.
In this updated daily bar chart of ECA, below, we can see that prices found support in October and February/March and early April on dips below $10.50. This month ECA has found buying interest at $12.00 and below. Buyers of ECA are now much more aggressive. Prices made a small gap to the upside yesterday to close above the rising 50-day moving average line and lengthened its distance above the rising 200-day average. The On-Balance-Volume (OBV) line was rising into January as prices reached $14 and only declined slightly when ECA corrected to $10. From April the OBV has risen to a slight new high to perhaps foreshadow new price highs soon. The Moving Average Convergence Divergence (MACD) oscillator dipped just below the zero line this month but is poised to move back above it for a buy signal.
In this weekly bar chart of ECA, below, we see positive signals. Prices are above the rising 40-week moving average line after a successful test of that indicator. The weekly OBV line has been rising since last June and tells us there has been aggressive buying to support further gains. The trend-following MACD oscillator is above the zero line and poised to turn up again.
In this Point and Figure chart of ECA, below, we can see that a trade at $14.50 will be a breakout and $19.00 is our first readable price target.
Bottom line: The energy sector is turning up again and ECA is one stock that should participate. Traders could go long ECA at current levels and on closes above $14 and $14.50. Risk below $12 looking for $19 initially.