[ad_1]
While energy has become a chronic underperformer in 2025, there are several infrastructure plays within the sector that are demonstrating much more constructive technical configurations as we near the end of May. Today we’ll examine how Williams Companies (WMB) may be preparing for a “big base breakout” pattern with significant upside potential. The daily chart of WMB shows how the stock was in a clear accumulation phase for most of 2024, rising from a February 2024 low around $35 to reach just over $60 by November. From that point on, the chart settled into a consolidation phase with support around $52 and resistance in the $60-$62 area. With the price in a clear equilibrium for the past six months, we’ve been waiting patiently for a big base breakout pattern. After trending sideways for an extended period, the price finally exits the range and makes new high above the well-established resistance level. We can use the height of the basing pattern to project a minimum upside objective post-breakout. Based on the recent setup, that would imply a bullish target of around $72 if and only if WMB can power to a new all-time high above $62. What gives us confidence that the big base breakout pattern will be completed? Volume indicators suggest that even though the price has been in a consolidation phase, there has been more bullish than bearish volume in 2025. The bottom indicator, Chaikin Money Flow, weights the daily volume readings based on where the stock closes every day within its daily range. If a stock closes near the highs of the day, then that day’s volume is considered mostly bullish volume. A close near the lows would imply that most of the day’s volume was more selling pressure. The Chaikin Money Flow has been above the zero line since December 2024, suggesting that even though the price has been in a sideways trend, there has been more buying power demonstrated versus selling pressure. If we can confirm a breakout above price resistance with improving Money Flow readings, that would confirm that the bulls are firmly in control. Finally, let’s dig into some relative strength measures that show Williams has performed relative to other areas of the equity markets. First, we can see that WMB has outperformed the S & P 500 over the past 12 months, with the relative line again turning higher in recent weeks. Next, we’re showing the relative performance of the energy stocks as a whole to confirm that this sector has indeed been one of the worst relative performers in 2025. In fact, the sector is close to making a new 12-month relative low this week. In the next two panels, we can see that WMB has been outperforming other pipeline companies in 2025, and that pipelines have been a strong relative performer over other energy stocks during the last year. Overall, we can confirm that the strength in Williams is not only a thematic play on energy infrastructure but also represents an individual stock that has differentiated itself within the industry. I was taught that the best approach is to find winning stocks in leading industries and then follow those uptrends as long as possible. Given a potential upside breakout for WMB, investors may be rewarded for following the latest signs of a strong uptrend phase. -David Keller, CMT marketmisbehavior.com DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
[ad_2]
Source link
