Strategies & Market Trends : Underexposed Technical Analysis

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To: Kitskid who wrote (167)9/26/2017 4:05:06 AM
From: Underexposed1 Recommendation

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Ok let us first look at AltaGas Ltd. from the point of view of a long term hold.

Here is my P&F chart. Your chart is not a bad one but it is hard to see resistances and supports using a $0.20 box size. With a $0.25 box size those levels show up clearer.

I have added simple moving averages to the P&F chart since I last discussed this with you. In P&F charts the data for these SMA's is based on the mid-point of columns. The blue line is based on 5 columns and the red line is based on 10 columns. Right now, the red line is above the blue and the current gap between them is diverging and this is bearish right at the moment.

The share price is flush up against a resistance now at $29.00. This should be fairly strong due to the line is formed by 4 bottoms of "o" columns... two of which are fairly recent. If it passes that it runs into another resistance at $30.25 and it will continue to meet resistances until it frees itself by passing another serious resistance band from $32.50 - $33.25

I am not saying it cannot be done eventually but it has its work cut out for it.

Here is the "trigger chart"

The indicators at the bottom are quite bullish. It would have been a nice short term buy a few days ago. There is no hint in the indicators that there is any problem.

However if you look at the share price itself, you will see that the share price has closed ABOVE the upper bollie for 5 nights in a row. This is rare and I would expect a pullback very soon. The P&F chart shows the price is butt up against a resistance... this reinforces my suspicions of a pullback soon.

This does not mean that the resistance will not be challenged again.... But I would be wary about buying ALA.TO right now.

Here is another chart... my ichimoku chart

This chart is actually quite bullish... the indicators at the bottom are bullish and the share price has cleared a red cloud which is not easy to do so quickly. The top of that red cloud will be a support and it would not surprise me to see a pullback that I see in the previous chart to be supported there ($28.40)


A lot is riding on the AltaGas acquisition of WGL Holdings Inc. (NYSE:WGL). AltaGas issued the subscription receipts ALA.R to finance this acquisition. The benefits of this acquisition are shown in this weblink

Altagas subscription receipts

When the acquisition is complete, apparently these receipts convert to shares in AltaGas. The fact that these receipts still exist means the completion of the deal is still pending.

Other than the expectation of a pullback in share price that I see, it looks like AltaGas would not be a bad buy but I would only consider it when the acquisition was complete, personally.

As far as, buying ALA.R goes...I really don't see the point. The subscription receipts were issued at a discount... but now the ALA.TO and ALA.R prices are the you don't get the benefit of the discount now. If the planned acquisition goes ahead then your ALA.R shares will be converted into ALA.TO shares.

Here are their charts that I get from TMX Money

As you can see the two track each other almost exactly. Both have the same dividend of $0.175cad (7.16%) monthly

I see no advantage of holding the receipts now. If I were buying into AltaGas, I would buy the stock not the receipts.

I consider this stock a short term play right now... if the share price clears $33.25 and that acquisition of WGL goes through.... I would then consider it as a long term play.

I hope this discussion helps you.



I am not a registered broker. I am retired and use Technical Analysis as the main tool in my investment decisions. Accept or reject my comments as you will, but do your own Due Diligence (DD) before making any decisions based on the information I provide.

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