The Williams Companies, Inc. (WMB) stock has jumped by more than 8% on Tuesday after the Oklahoma-based treatment of the energy giant beat analysts ‘ second quarter expectations. The adjusted profit for the period spring to 25 cents per share, comfortably surpassing the Street consensus of 23 cents per share. However, the results of the company contracted 3.8% on a year on year basis in the middle of a weaker performance of its Transmission and Gulf of Mexico, and the Western operations. During this time, revenues of $1.78 billion were down from $2.04 billion in the same quarter of last year.
Despite the challenges posed by the sars coronavirus pandemic, Williams Companies ceo Alan Armstrong believes that the natural gas market fundamentals remain strong. “We remain optimistic with respect to natural gas demand growth because we recognise the essential role of deposits of natural gas in a clean energy economy,” he told investors during the earnings call. Tuesday, the closing, the stock has a market capitalization of $25.89 billion, offers a 8.11% return of the dividend, and is trading 3.55 percent lower so far this year. However, the shares have recovered approximately 10% over the past three months.
Bulls drove the price above what looks like the neckline of an inverse head and shoulders pattern after the quarterly result positive. In addition, the 50-day simple moving average (SMA) crossed above the 200-day SMA late last month – a signal that often mark the beginning of a new bullish trend. Those who open a long position should book profits on a move to $27, where the price of encounters a lot of resistance from a key of the horizontal line. Limit downside risk by placing a stop just below the 200-day SMA.
Below, we look more closely at the two other major processing companies of the energy stocks that rallied in the wake of The Williams Companies upbeat quarterly results.
Kinder Morgan Inc. (KMI)
Kinder Morgan Inc. (KMI) operates as an energy infrastructure company in North America, with 70 000 km of natural gas pipelines in the UNITED states and nearly 10,000 miles of oil and refined products pipelines. The 84-year-old energy firm, saw its earnings for the second quarter were down 22.7% from the year-ago period due to lower contributions from its Tennessee gas pipeline, and reduction of the demand for refined products. In spite of Kinder Morgan stock trading 27.85% lower on the year, it has outperformed the oil and gas intermediaries of the industry average of almost 3% in August. 5, by 2020. It also offers a mouth-watering 7.48% dividend yield.
The company’s share price has been launched more than 3% more of the essential support at $14 on Tuesday, in a move that could see the bulls test the multi-month downtrend line around$ 16. If the stock clears this area, look for a possible race to the major resistance at $18.50. Those who buy at these levels should consider placing a stop-loss order below the July 31 low of $13.80 to protect the trading capital.
ONEOK, Inc. (OKE)
With a market value of nearly $ 13 billion, ONEOK, Inc. (OKE) collects, processes, stores and transports natural gas in the united States. The company, which has assets in the Permian and Rocky Mountain regions reported second quarter adjusted earnings of 32 cents per share on revenue of $1.7 billion. These figures contracted by 57.3% and 32.4%, respectively, in the June 2019 quarter, due to weaker demand for energy products caused by the pandemic. As of August. 5, 2020, the shares yield an eye-watering 13.3%, but have fallen by almost 60% year-to-date. However, the analysts have a 12-month price target on the security to $33.71, indicating a 15% premium from Tuesday, $29.19 close.
After the discovery of a floor of support at $25 price action and the 61.8% retracement Fibonacci level, the stock is steadily higher over the past three weeks. Swing traders who enter here should reflect on the definition of a take-profit order to close to $46.65, where the actions of finding a point of confluence of resistance from the top of the Fibonacci grid, and the tendency to the slope of 200-day SMA. Reduce losses if the stock fails to hold above $25 support.