The dominant feature of the longer-term chart pattern of Encana Corporation (ECA) is the series of higher lows juxtaposed against a series of horizontal highs between 35.60 and 35.63. This type of pattern creates enormous upward price pressure on the horizontal highs.

In the absence of a breach of the underlying series of higher lows, this pattern should be penetrated and thereafter will unleash a powerful thrust that projects to a 39-40 target zone.

At this juncture, only a decline that breaks the December-April up trendline at 31.30 will weaken the still developing "pressurized" pattern.

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.