KMI Bearish Cross Plus Possible Head And Shoulders
Published April 18, 2017
On April 17, 2017, Kinder Morgan Inc (KMI) crossed below its 200 day moving average (DMA) and its 50 DMA crossed below its 100 DMA. Historically both bearish crosses have not occurred on the same day. Historically the stock has crossed below the 200 DMA 14 times and the stock drops a minimum of 0.379%. It has a median loss of 3.716% and a maximum loss of 8.089% over the next 25 trading days. Historically the 50 has crossed below the 100 6 times with a minimum loss of 1.609%. It has a median loss of 3.912% and maximum loss of 13.387% over the next 25 trading days.
When we take a look at other technical indicators, the relative strength index (RSI) is at 46.5454. RSI tends to determine trends, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. The current reading declares the stock is relatively neutral.
The true strength index (TSI) is currently -2.3514. The TSI determines overbought/oversold levels and/or current trend. I solely use this as an indicator of trend as overbought and oversold levels vary. The TSI is double smoothed in its calculation and is a great indicator of upward and downward movement. The current reading declares the stock is moving up.
The positive vortex indicator (VI) is at 1.0716 while the negative is at 0.9058. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. The current reading declares the stock is up, but the negative indicator has begun to climb and the stock could continue to drop.
The stochastic oscillator K value is 33.4349 and D value is 55.5570. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the price action is trending up. When the D value is higher that the K value, price action is trending down. The current reading declares the stock is dropping.
Considering the moving average crossover, RSI, TSI, VI and stochastic levels, the overall direction appears to continue heading down. Based on historical movement compared to current levels and the current position, the stock could drop another 2.18% over the next 22 trading days. The stock has also formed a possible head and shoulders pattern with the neckline below 20.80 which could be a solid target price. Earnings are scheduled for April 19 which could cause a major price swing in the first few days of the projected timeframe. Estimates are in line with the previous two quarters results. After both earning announcements the stock went up but ultimately dropped over the next 25 trading days.
DISCLOSURE: I currently do not have positions in the stock mentioned above. I most likely will not enter a position within the next 72 hours. Historical movements and technical indicators should never be the sole basis for entering positions involving risk. Make sure appropriate research is conducted prior to taking any risk in a marketplace.