Stock of the day: Eni

Today we will analyze Italian oil hegemon ENI, where we can see preparation for a major movement. It is still yet to be decided in which direction though.

Currently, ENI is moving sideways, pretty much the same as oil. Unfortunately for us, this sideways movement is on very high levels. Brent moved from 100 to 115 USD. High oil prices mean higher profits for oil producers, so there should be no surprise that ENI is constantly flirting with long-term highs.

Currently, the price is locked inside of a symmetric triangle pattern (black lines). We’re precisely in the middle of the triangle, which is absolutely the worst place to trade. Why? Because changes for the price to go up or down is 50/50. It’s a bad place to trade but it’s great to prepare for a trade. At some point, ENI has to end this triangle with a breakout. Usually, a breakout to the upside gives a strong buy signal and a breakout to the downside gives a sell signal. All that’s left to do now is to wait for the breakout.

They say that patience is the virtue of a successful trader. Thanks to examples like this, you know why.