We last paid a visit to Enterprise Products Partners L.P. (EPD) in early April. We had a positive viewpoint at the time: "Go long or add to longs on EPD on a close above $28.50 and risk a close below $27. $34 is our initial upside price objective."
With hindsight, we can see that prices did not break out over $28.50 -- and with prices now retesting the lows of November/December, a different outlook is probably warranted. Let's pay EPD another visit this morning.
In this daily bar chart of EPD, above, we can see that the stock moved sideways to lower from April to July. Prices crossed several times above and below the 50-day and the 200-day moving averages. In early August, prices began to weaken more, with the slope of the 50-day moving average line turning down.
The daily On-Balance-Volume (OBV) line peaked in late February and has been on the defensive since. A downward-sloping OBV line tells us that sellers of EPD are being more aggressive. In the bottom panel, the 12-day momentum study is not displaying a bullish divergence, so we cannot say that the rate of the decline is slowing.
In this updated weekly bar chart of EPD, above, we can see that prices are below the flat 40-week moving average line. The weekly OBV line has been pointed down since early July, telling us that sellers on this timeframe have also been more aggressive. The weekly Moving Average Convergence Divergence (MACD) is in a bearish mode now below the zero line.
In this Point and Figure chart of EPD, above, we can see that prices broke below $25.42 and opened the way to a possible downside price target of $23.32.
Bottom line: EPD will have to shows us fresh signs of accumulation (buying) and a rising OBV line before we recommend the long side again.