ENBRIDGE INC (NYSE:ENB) Shows Strong Technical Setup for a Breakout

Technical analysis investors often look for stocks showing both good existing momentum and good buying chances, a method well represented by joining ChartMill's Technical Rating and Setup Quality Rating. The Technical Rating judges a stock's general condition by looking at items such as relative performance and trend path, and the Setup Quality Rating finds patterns of sideways movement that indicate a possible price rise is near. Stocks with good scores on both measures are seen as good options for technical breakout methods, as they show well-established upward paths with a chance to buy with limited risk.

Technical Condition and Trend Examination

ENBRIDGE INC (NYSE:ENB) receives a good Technical Rating of 7, showing a stock in a verified upward trend. This number is important for the breakout method as it verifies the stock has the existing condition to maintain a possible upward price change. The detailed technical report supports this rating with a few main points:

• The stock shows upward paths in both the near and distant term, a good indication for ongoing momentum.
• It is doing better than a large part of the market, showing better annual performance than 74% of all stocks and performing better than 70% of similar companies in the Oil, Gas & Consumable Fuels industry.
• The price is now above a few main moving averages (SMA20, SMA100, SMA200), which frequently serve as changing floors in an upward trend.

These items together describe a stock with good technical condition, meeting the "which stock to buy" part of the method by finding an asset with a high chance of continuing its upward path.

Setup Condition and Sideways Movement Pattern

In addition to a good trend, a high-grade setup is needed for timing a purchase. ENB does well here too, having a Setup Rating of 8. This good number answers the "when to buy" question by finding a time of sideways movement, which often comes before a new upward phase in the trend. The examination points out a recent price channel between $45.45 and $48.90, with price now moving near the top of this area. This tightening price movement, along with lower price swings, forms a clear setup.

• A defined floor area has been formed between $46.61 and $48.25, giving a sensible level for setting a protective stop-loss order.
• The system has seen activity from large buyers in recent days, often a sign before a notable price change.
• An automatic trade idea based on this setup suggests a purchase on a price move above $48.91, with a stop-loss set below the floor area at $46.60.

This organized setup lets technical investors specify their risk clearly while placing for a possible breakout, reducing uncertainty and feeling-based choices.

Floor and Ceiling Levels

The technical examination finds main levels that are important for trade planning. The most important floor is a multi-part area between $46.61 and $48.25, strengthened by a mix of moving averages and trend lines. This forms a large block that, if maintained, could start the next upward move. For the ceiling side, the main block is a thinner area between $50.08 and $50.47. A clear move above this ceiling, after a breakout from the present sideways movement, could allow for more upward movement.

Market Situation and View

While ENB shows good individual traits, it is trading mostly similarly to the wider market, which is now showing a positive near-term trend. This similarity can be seen as a positive, as it indicates the stock's possible breakout would be helped by a good market setting instead of happening alone. For investors using a technical breakout method, ENB presents a good case based on its good scores for both trend condition and setup grade.

For investors looking for more chances like this, new technical breakout setups are found each day. You can find the newest list by going to the Technical Breakout Setups screen.

Disclaimer: This article is for informational purposes only and does not constitute investment advice of any kind. All trading and investment decisions involve risk, including the possible loss of principal. The technical setup discussed was generated automatically and should be validated by your own analysis before considering any investment action.