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ETE, WMB, PAGP, and WGP: Analyzing Technical Indicators

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Mar. 14 2018, Updated 7:31 a.m. ET

Moving averages

All four of the selected peers—Energy Transfer Equity (ETE), Williams Companies (WMB), Plains GP Holdings (PAGP), and Western Gas Equity Partners (WGP)—went below their historical moving averages due to turmoil in the midstream energy sector.

A fall in US Treasury yields, gains in crude oil prices, and a recovery in drilling activity in some regions could push these general partners, particularly Williams Companies, Plains GP Holdings, and Western Gas Equity Partners, above their long-term moving average, which would result in bullish sentiment. Positive updates on Energy Transfer Partners’ (ETP) organic expansion projects could result in bullish sentiment in Energy Transfer Equity.

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Short interest as a percentage of the float

The short interest in Energy Transfer Equity (2.9%) and Plains GP Holdings (2.9%) as a percentage of float ratio is the highest among the peers. The Alerian MLP Index (AMZ) has an average short interest as a percentage of float of 2.4%. The short interest in Energy Transfer Equity and Plains GP Holdings is above the industry average. The short interest in Western Gas Equity Partners (WGP) and Williams Companies (WMB) of 1.3% and 1.8%, respectively, is significantly lower than the industry average.

Plains GP Holdings has seen the highest increase in the short interest in the past month. At the same time, the short interest in Energy Transfer Equity has come down significantly. A decline in the short interest means a decrease in a short position, which hasn’t been closed. The lower short interest indicates bullish sentiment in Energy Transfer Equity, while the higher short interest for Plains GP Holdings indicates bearish sentiment.

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