EnCana Corp. looks to be setting up a trade.

Oct 5th, 2015 – Comment

Could be more to this leg up


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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ECA LOGO

Hello Lou,

Enjoy the John Oakley show and the advice you give. I have been reading that EnCana and American Airlines are 2 stocks poised to make some big gains over the next 12-16 months.

What are your thoughts?

Scott

 

Hey Scott,

 

Thanks for listening, the assignment, and your kind words. All are greatly appreciated. I will inspect the charts for EnCana Corp. (ECA TSX) today and American Airlines Group Inc. (AAL NASDAQ) next time. My analysis will not cover a 12- 18 month period.

This will be the fifth time since 2012 that I examine the case for ECA. The last time was in August 26, 2015 for Boris. The shares were trading for $8.00 and Boris wanted my opinion. The research indicated that there was an established down, a death cross that surfaced in November of 2014, and the inability to hold support at various price levels. The stock got a lift on the announcement that the company had sold some assets to pay down debt but there were no indications that we could expect a trend reversal. The shares ran to resistance along the 50-day moving average near $10.00 but then pulled back.

Another audit of the charts will help identify if ECA has enough gas in the tank to start another leg up.

 

ECA

The three-year chart continues to exhibit an established downtrend, and a death cross. The MACD and the RSI both generated sell signals in May when the stock was trading close to $17.00. The momentum indicators signalled a buy in late August as ECA continued to track higher after the announcement of the asset sales. The leg up lasted for three weeks generating a 25% return for investors who caught the ride.

 

 

 

ECA2

The six-month chart depicts a stock that needs to break above resistance at $10.00 if it is going to extend the move higher. The next level of resistance is at $11.00 and after that $12.00. The MACD and the RSI are turning higher suggesting that a trade is setting up.

However there are still no indications that we can expect a trend reversal in the near term.

 

Next time I will run the charts of American Airlines Group Inc.(AAL NASDAQ)

 

Make it a profitable day and happy capitalism!

 

 

 

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