Spectra Energy Corp owns and operates a portfolio of natural gas-related energy assets in North America. The Spectra Energy Partners segment engages in the transmission, storage, and gathering of natural gas, as well as transportation and storage of crude oil and natural gas liquids (NGLs). The Distribution segment offers natural gas storage, transmission, and distribution services for residential, commercial, and industrial customers in Canada. The Western Canada Transmission & Processing segment provides natural gas transmission, and gas gathering and processing services; and services to natural gas producers to remove impurities from the raw gas stream. The Field Services segment gathers, compresses, treats, processes, transports, stores, and sells natural gas; produces, fractionates, transports, stores, and sells NGLs; recovers and sells condensate; and trades in and markets natural gas and NGLs.
Take a look at the 1-year chart of Spectra (NYSE: SE) below with my added notations:
SE had been steadily trending higher going into September. Since the September peak, however, the stock had stalled at a level of resistance at $43 (green). Now that SE has broken above that level, $43 should provide support for higher prices.
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The Tale of the Tape: SE broke through its key level of resistance at $43. A long trade could be entered on a pull back down to that level. However, a break back below $43 could negate the forecast for a higher move and would be an opportunity to get short the stock.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
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