Article by: www.wealthblueprintletter.com, 1/23/2015.
Boardwalk Pipeline Partners, LP, through its subsidiaries, provides transportation, storage, gathering, and processing services for natural gas and natural gas liquids (NGLs). The company operates interstate natural gas and NGLs pipeline systems, including integrated storage facilities. Its pipeline systems contain approximately 14,195 miles of interconnected natural gas pipelines, directly serving customers in 13 states and indirectly serving customers throughout the northeastern and southeastern U.S. through various interconnections with unaffiliated pipelines. The company also owns approximately 255 miles of NGLs pipelines serving customers in Louisiana. In addition, it has underground storage caverns having aggregate capacity of approximately 207.0 billion cubic feet of working natural gas and 17.6 million barrels of NGLs.
Take a look at the 1-year chart of Boardwalk (NYSE: BWP) below with added notations:
After a steady 5-month rally BWP dropped into October and has been trading sideways ever since. During the sideways move the stock has formed a common pattern known as a rectangle. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern.
BWP’s rectangle pattern has formed an $18 resistance (red) and a $15 support (blue). At some point the stock will have to break one of the two levels.
The Tale of the Tape: BWP is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $15 or on a breakout above $18. The ideal short opportunities would be on either a break below $15 or on a rally back up to $18.
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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