We haven't covered Kinder Morgan Inc. (KMI) since February, when we said, "This weekly Point and Figure chart shows that a weekly trade at $24 is a clear upside breakout. The initial potential price target for KMI when it breaks out is the $34 area." KMI became a technical disappointment as it fizzled and began a slide lower, never breaking out at $24.
The pace of the decline has slowed since August, so now looks like another opportunity to see if a reversal is possible.
In this daily bar chart of KMI, above, we can see that prices are still in a downtrend, but some bullish divergences are shaping up and could be foreshadowing a price recovery into year-end. Prices are below the declining 50-day moving average line and the declining 200-day line. Moving average signals are late by definition, so other indicators need to be examined.
Volume was heavier at the end of October and then lighter in November as prices retested the lows. Sometimes lighter volume on a "retest" is a positive sign, as the bears have retreated. The daily On-Balance-Volume (OBV) line has been weak since late July, but it has not made a new low in November when prices made a new low.
The 12-day momentum study in the lower panel of this chart shows a higher low from August to October while prices show a lower low. This difference between price and momentum is a bullish divergence and tells us that the decline has slowed since August.
In this weekly bar chart of KMI, above, we can see that prices are below the declining 40-week moving average line. The weekly OBV line is pointed down as well as the Moving Average Convergence Divergence (MACD) oscillator. A weekly close above $20 is needed to break the 40-week average line.
In this Point and Figure chart of KMI, above, we can see two lows at $17.59. This level may continue to hold, but a rally to $18.31 and then $18.49 is needed to really shift the balance of power.
Bottom line: KMI still needs to prove itself on the upside, but our volume indicators and momentum study are giving us some positive clues.