Any thoughts on Enbridge?
Thanks for the assignment. This will be the second time that I investigate the charts for Enbridge Inc. (ENB TSX). The last time was on September 7, 2011 when the shares were trading for $32.27 and the dividend yield was 3%.
Bruce wanted to know what the chances were that the Northern Gateway Pipeline would be approved and what that could mean for the stock.
My thoughts on the Northern Gateway were that it was a project forecast to cost $4.5 billion and take until 2016 before construction might be completed. In addition it was noted that there was a lot of regulatory hurdles to overcome before the project could even begin to move ahead.
It was advised to look at ENB based on the current situation and if Northern Gateway got a green light to treat it as a bonus. The research indicated that with a strong uptrend line in place in concert with a golden cross that the stock offered a good buying opportunity.
In retrospect that was the right call. The shares ran to a 52-week high of $66.14 in April of 2015. Since then the shares pulled back to a 52-week low of $40.03 in 2016. By the way Northern Gateway still hasn’t been built.
Another inspection will inform my thoughts.
The three-year chart illustrates the retreat that started in April of 2015 and the death cross that formed in August. ENB started a new leg up in 2016 but make note of the resistance that has come in along the 200-day moving average and along the downtrend line.
The six-month chart highlights the resistance along the 200-day moving average. Take notice of the signals generated by the MACD and the RSI including the sell in October of 2015 and the buy in late February.
At the moment we need to see ENB break above the 200-day moving average with conviction if the advance is going to continue.
Next time I will inspect the details surrounding Nano One Materials Corp. (NNO TSXV) for George.
Make it a profitable day and happy capitalism!