ECA.TO pushes through key technical resistance level
Encana Corp (ECA.TO) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, ECA.TO finished the week 7.56% higher at 8.96 after gaining $0.20 (2.28%) today, notably outperforming the TSX 60 (0.19%). Today's close at 8.96 marks the highest recorded closing price since December 5, 2018. Closing above Thursday's high at 8.82, the stock confirmed its breakout through the prior session high after trading up to $0.30 above it intraday.
Daily Candlestick Chart (ECA.TO as at Jan 11, 2019):
Friday's trading range has been $0.55 (6.34%), that's above the last trading month's daily average range of $0.43. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for ECA.TO.
One bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 8.86 (now S1), which is likely to act as support going forward. The last time this happened on December 27, 2018, ECA.TO gained 0.38% on the following trading day.
While Encana is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Further buying might move prices higher should the market test December's nearby high at 9.44.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed above last periods high" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for Encana. Out of 364 times, ECA.TO closed lower 51.65% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 50.00% with an average market move of -0.27%.