Don't Ignore This Chart!

Encana Breaks Downtrend On Strength Of Earnings

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Actually, Encana (ECA) has broken two downtrends - a short-term trend and a long-term trend.  ECA hit its all-time high of roughly 42.50 just before this bull market began.  Shareholders of ECA haven't seen much bullish action since this seven year bull market began, but technically things are improving on both their daily and weekly charts.  Check them out:


The daily chart shows that today's reaction to its better than expected earnings is a bullish triangle breakout with very heavy volume.  But the longer-term weekly chart has been acting very bullishly as well:

Note that recent pullbacks have been holding onto that rising 20 week EMA support and then bouncing.  And now that both the daily and weekly MACDs are showing strengthening momentum, ECA appears to be a solid trading candidate with perhaps a stop below either 7.29 (20 week EMA) or 7.50 (triangle support on daily chart).

Happy trading!

Tom

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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