Can Enbridge Energy Partners Gain Upward Momentum from Here?


Dec. 4 2020, Updated 10:53 a.m. ET

EEP’s moving average

Enbridge Energy Partners (EEP) came close to its short-term 50-day SMA (simple moving average) during last week’s gain. However, the stock is still trading 0.4% and 9.0% below its 50-day and 200-day SMAs, respectively.

This could indicate a bearish sentiment toward the stock. Peers Magellan Midstream Partners (MMP) and Buckeye Partners (BPL) are trading 4.6% and 23.4%, respectively, below their long-term moving averages.

EEP’s strong outlook for 2018 through 2020 could push the stock above its long-term moving average, resulting in a bullish sentiment. At the same time, a decline in crude oil prices and drilling activity could push EEP further below its 50-day SMA, resulting in a bearish sentiment.

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Short interest in EEP

The short interest in EEP was 9.2 million shares as of December 1, 2017. At the same time, the short interest in EEP as a percentage of its float (or its short interest ratio) was 4.26%, compared with last month’s average of 3.98%.

The short interest in EEP is still higher than the past one-year and three-year averages of 2.75% and 2.92%, respectively. This could indicate a bearish sentiment toward the stock.

EEP’s price forecast

EEP’s 30-day implied volatility was 29.2% on December 1, 2017. This is slightly above its 15-day average of 29.0%. Based on its current implied volatility, EEP could trade in the range of $14.17–$15.37 over the next seven days.

EEP is expected to trade within this range with a 68.0% probability. This assumes a standard deviation of one and a normal distribution of prices.

In the next and final part of this series, we’ll look into last week’s rating updates among master limited partnerships.


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