KINDER MORGAN INC (NYSE:KMI) Shows Strong Technical Breakout Potential with High Ratings

Technical breakout strategies focus on spotting stocks with solid momentum that are pausing before their next rise. The method uses two main indicators: the ChartMill Technical Rating, which measures a stock’s trend strength, and the Setup Quality Rating, which checks if the stock is forming a good entry pattern. Stocks with high scores in both areas often offer attractive risk-reward setups, as they show both steady momentum and a clear pause phase.

KINDER MORGAN INC (NYSE:KMI) matches this breakout model, with a Technical Rating of 7 and a Setup Rating of 8, signaling a technically strong stock in a good pause pattern.

Technical Strength: A Stable Base

The ChartMill Technical Rating checks a stock’s trend strength, relative performance, and position against key moving averages. KMI scores a 7, showing a stock with a solid technical base:

• Good Relative Performance: Over the past year, KMI has beaten 81% of all stocks, showing steady upward momentum. It also ranks in the top 17% of its industry (Oil, Gas & Consumable Fuels), highlighting sector strength.
• Steady Moving Averages: The stock is above its 50-day, 100-day, and 200-day moving averages, supporting a positive medium-term trend.
• Balanced Short and Long-Term Trends: While the stock isn’t in a strong uptrend now, its pause near yearly highs hints at possible continuation if resistance is broken.

A high Technical Rating is key for breakout strategies because it confirms the stock has the strength to hold a move higher. Stocks that break out from weak bases often fail, making KMI’s solid rating a plus.

Setup Quality: A Clear Pause with Defined Levels

The Setup Quality Rating checks if a stock is forming a tradable pattern with clear support and resistance. KMI’s 8 rating points to a good setup:

• Pause Near Resistance: KMI has been trading between $26.48 and $28.54 over the past month, with resistance near $28.69,$29.02. A move above this zone could signal the next rise.
• Strong Support Below: Multiple support levels sit between $26.97 and $27.93, offering a clear stop-loss area for traders.
• Lower Volatility: The stock’s recent price action has narrowed, a common sign before breakout moves.

Breakout traders look for stocks that have paused after a strong move, letting momentum rebuild. KMI’s setup suggests it is preparing for a potential breakout, with clear levels for entry and risk control.

Trade Setup and Risk Factors

The technical report suggests a possible breakout entry above $29.03, with a stop-loss below $26.96. This represents a 7.1% risk per trade, fitting typical breakout strategy rules.

Key points to watch:

• Volume Confirmation: A breakout should ideally happen on higher volume to confirm big player interest.
• Market Conditions: While the S&P 500’s short-term trend is positive, broader market strength could help KMI’s breakout try.

Finding Other Breakout Setups

KMI is one of many stocks showing strong technical setups. For more breakout ideas, check the Technical Breakout Setups screen, which filters for high-rated stocks daily.

Disclaimer: This analysis is for informational purposes only and should not be seen as investment advice. Always do your own research and consider risk management before trading.