Q: What are we looking for?
A: A stock in an uptrend that pays a dividend. Sounds good without being too greedy.
The natural gas stock WGL Holdings (WGL) fits the bill.
This chart of WGL, above, shows us a number of useful technical clues.
After a nine-month sideways consolidation, WGL broke out to new highs earlier this month. The slope of the 50-day moving average is positive, and the On-Balance-Volume (OBV) line is in a slow and steady ascent.
This longer-term view of WGL, above, is also positive.
Prices are above the rising 40-week, or 200-day, moving average. Notice the broad consolidation around the $40 level from 2011 through most of 2014. This kind of base can support a lengthy rally.
Our price targets for WGL are $70 and then $80, a double from the $40 base. A move down below the mid-point of the nine-month $52-$58 consolidation, i.e. below $55, would get us to re-examine our bullish view of WGL.