Encana (ECA:TSX) candlestick chart analysis

Positive reaction to earnings release for Encana
Encana candlestick chart showing the positive reaction to the earnings release and the upward movement in natural gas pricing.

Encana (ECA:TSX) Daily Candlestick Chart

The reaction of the stock price to a news event, which includes earnings releases, is all that counts. You take your cue from this market signal and trade accordingly.

The intermediate trend is sideways and the near-term trend is up. The key support and resistance levels are identified on the above chart. Technical analysis is all about evaluating the probabilities and there is a high probability that Encana has found a bottom around $17.50. A confirmed break above the $21.00 to $22.00 level would indicate an intermediate target price of $28.00. My definition of a confirmed break in this case would be $22.66 that holds for at least two days.

Encana, with $2.4-billion (U.S.) in cash on its balance sheet today, aims to increase that number to $3-billion by year’s end.

Reference the Encana website to review the fundamental data for the company.

Reference my last chart analysis for Encana on March 18, 2011.

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Note: This technical analysis is for educational purposes so you can learn to trade online using candlestick charts. Please conduct your own chart analysis or consult your financial advisor before making investment decisions. The chart snippets are from BigCharts.com which I recommend and have used for fifteen years. The author of this article may hold long or short positions in the featured stock or index.

© 2012 TradeOnline.ca

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