Is ETP Setting up for a Break Out?

Published on Thursday, 24 May 2012 05:48 Written by TradersHuddle Wire

New York, May 24th (TradersHuddle.com) - Shares of Energy Transfer Partners, L.P. (NYSE:ETP) closed the trading session at $45.43 with its price action in a very tight range, given that calculated support is set at $43.76 and the calculated resistance is set at $46.30.

Energy Transfer Partners, L.P. (NYSE:ETP) is a publicly traded partnership owning and operating a diversified portfolio of energy assets. ETP has pipeline operations in Arizona, Colorado, Louisiana, New Mexico, and Utah, and owns the largest intrastate pipeline system in Texas. The company currently has natural gas operations that include gathering and transportation pipelines, treating and processing assets, and three storage facilities located in Texas. And its one of the three largest retail marketers of propane in the U.S.

ETP's stock price action indicates that both sellers and buyers are materializing very close to each other. This signals an area where momentum is building, since the stock can resolve by breaking out of the developing tight range.

Traders wanting to establish a position should pay close attention to ETP's price action, as any movement outside its predefined range of $43.76 and $46.30 could grasp the attention of momentum buyers that look for a big movement in the price of the stock. Traders need to be aware that tight range resolution works both ways, hence, a move below support could spark above the average selling. A tiered approach could be the best way to start a position; enter into it while the stock is in the tight range, and then add to this position as it breaks and closes above resistance.