Enterprise Products Partners (NYSE:EPD) Shows High Technical and Setup Ratings for Potential Breakout

For investors who use charts to inform their choices, a common method looks for stocks that show both good technical condition and are positioned for a move soon. This method centers on two main questions: which stock is in a good upward trend, and when is the correct moment to purchase it? One way to address these questions is by employing specialized ratings such as the ChartMill Technical Rating and Setup Quality score. The Technical Rating, from 0 to 10, measures the general condition and trend of a stock, with readings of 7 or above signaling a good upward trend. The distinct Setup Quality score, also from 0 to 10, examines the consolidation pattern on the chart, searching for narrow price ranges that indicate a possible breakout point is developing. A stock that achieves high marks on both measures can offer an interesting possibility for a technical breakout trade.

A recent search for such patterns has identified Enterprise Products Partners LP (NYSE:EPD), a leading company in midstream energy infrastructure. The firm's large system of pipelines, processing facilities, and storage terminals provides the essential structure for moving and storing natural gas, natural gas liquids (NGLs), and crude oil. As shown in the latest ChartMill Technical Analysis report, EPD currently displays a profile that matches the breakout method's main requirements.

Technical Condition: A Good Base

The first part of the breakout method is verifying a stock is in a lasting upward trend, which is measured by a high ChartMill Technical Rating. For EPD, this rating is a 7 out of 10. This number is supported by multiple favorable technical elements that point to inherent condition.

• Trend Direction: Both the near-term and longer-term trends for EPD are presently upward. This agreement across different periods is a positive indicator, showing momentum is not only temporary but part of a larger upward movement.
• Moving Average Position: The stock is priced above its important short- and medium-term moving averages (20-day, 50-day, and 100-day SMAs), and these averages are themselves arranged in rising patterns. This arrangement frequently serves as a flexible support level.
• Recent Price Action: During the past three months, EPD has achieved a rise of about 7.6%, showing a period of significant upward price movement.

It is necessary to recognize the analysis also indicates EPD performs in line with the wider market and its industry group, and it trades in the central part of its 52-week range while the S&P 500 reaches new highs. This perspective means the technical condition relates more to its own positive chart formation rather than leading market momentum, which can be a characteristic of more steady, income-focused equities like master limited partnerships (MLPs).

Setup Quality: The Pause Before the Advance

A good trend by itself is not a signal to buy, entering at an incorrect moment can result in quick losses. This is where the Setup Quality score is vital. It finds periods of consolidation or "narrow" price action, which often come before the next upward step. EPD does very well here, having a high Setup Rating of 9.

This very good score is caused by particular price activity seen on the chart:

• Narrow Price Band: Over the last month, EPD has been moving in a tight range between about $31.55 and $32.54. This reduction in price movement and volatility is a typical sign of a building pattern, where buying and selling pressure find a short-term balance.
• Clear Support and Resistance: The consolidation has established definite technical levels. A support area is found between $31.37 and $32.41, created by a mix of trendlines and moving averages. Slightly above the recent price band, a resistance area exists between $32.51 and $32.55.
• Large Trader Activity: The report mentions that big participants have demonstrated activity in EPD in recent days, as seen in volume study on short intervals. This can be a supporting sign that the consolidation is drawing strategic buying.

The high setup score shows that EPD is not stretched from its moving averages and is instead forming a base. For a breakout trader, this formation supplies a clear plan: a possible entry point just above the identified resistance to confirm the breakout has started, with a sensible stop-loss level set below the nearby support area to control risk.

A Possible Trade Plan

Built on the joined study of its technical condition (Rating: 7) and very good setup formation (Rating: 9), the technical report proposes a specific plan. The suggested setup includes an entry order just above the resistance at $32.56, expecting a breakout from the recent consolidation. A stop-loss order below the 10-day low near $31.54 would set the risk, equating to a possible loss of about 3.1% on the trade. It is essential to know this is an automatic example based only on price levels, investors must always perform their own study, think about basics like distribution coverage, and know about future events like earnings.

The finding of EPD resulted from a systematic filter made to select for stocks showing this specific mix of characteristics. For investors wanting to see other possible breakout choices that meet similar standards of good technicals and high-quality setups, the filter is operated each day and can be found here: View Today's Technical Breakout Setups.

---

Disclaimer: This article is for information only and is not investment advice, a suggestion, or an offer or solicitation to purchase or sell any securities. The study shown is based on technical measures and automatic reports, which are not assurances of future results. All investing carries risk, including the possible loss of principal. You should do your own research and talk with a qualified financial advisor before making any investment choices.