NiSource Inc (NYSE:NI) Shows Strong Technical Setup for Potential Breakout

Utility company NISOURCE INC (NYSE:NI) has appeared as a possible choice for technical investors after being found on a systematic breakout screen. This screening process finds stocks showing both good basic technical condition and a present price formation indicating a likely breakout from a period of sideways movement. The method relies on two specific measurements: the ChartMill Technical Rating, which examines the stock's general trend condition and momentum, and the ChartMill Setup Quality Rating, which judges the condition of its present sideways pattern. Stocks with good scores on both measurements are viewed as good for a possible upward price move, providing a specific entry point above a resistance level with a set stop-loss point below a support level.

Technical Condition and Trend State

A detailed look at the technical analysis report shows that NiSource has a good technical base, receiving a high rating of 9 out of 10. This strong rating is important for the breakout method, as it verifies the stock is in a steady uptrend, raising the chance that a breakout will result in a continuation of that trend instead of a failed signal. The report points out several main positive points that build this rating:

• Positive Trend Agreement: Both the recent and longer-term trends for NI are defined as positive, making a good setting for continued upward movement.
• Good Relative Performance: In comparison to the wider market, NI is doing better than 73% of all stocks over the last year and displays a steady pattern of increasing prices.
• Bullish Moving Average Agreement: The stock is priced above all its main simple moving averages (20, 50, 100, and 200-day), and each of these averages is itself in an upward pattern, showing continued buying interest across different time periods.

Good Setup and Sideways Formation

Adding to its strong technical condition, NiSource shows a good setup formation, also getting a 9 out of 10 for Setup Quality. This measurement is important as it finds times of price sideways movement, which frequently come before notable price changes. A high rating shows the stock is moving in a narrow range, giving a specific and lower-risk entry point for traders. The present setup for NI shows several positive features:

• Specific Support and Resistance: The stock has been trading in a specific range over the last month. An important support area is found between $42.11 and $43.33, while a main resistance area is between $43.84 and $44.18.
• Lower Volatility: The sideways movement has let recent price swings calm down, creating a coiled condition that often ends with a strong directional move.
• Pocket Pivot Signal: A recent "Pocket Pivot" signal was seen, a formation that often shows buying by large investors as the price increases on volume higher than normal.

Possible Trading Scenario and Market Situation

From this examination, a specific trading plan appears. The method would involve setting a buy-stop order just above the identified resistance area at $44.19, expecting that a move past this point could start the next upward move. To control risk, a stop-loss order would be set below the support area at $42.22. This plan contains the possible loss on the trade to about 4.46%. It is important to mention that while the S&P 500 displays a positive recent trend, NI's present setup is a pattern specific to the stock that stands on its own technical qualities.

For investors and traders looking for similar chances, new breakout choices are found every day. You can review the current list of good technical setups 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. The trading setup described is an automated example for illustrative purposes and is not a recommendation. Always conduct your own due diligence, consider your risk tolerance, and be aware of upcoming events like earnings reports before making any investment decisions. Past performance is not indicative of future results.