Stock of the day: ENEL

Stock of the day: ENEL
In today's analysis, we're turning our attention to ENEL, an Italian energy sector company. The technical landscape suggests we're on the brink of a major, long-term trading signal. The direction of this impending move will likely be determined soon.
ENEL's current situation is largely dominated by two wedges. The larger black one represents bullish correction of a long-term down-trend; while the smaller red one signifies bearish correction within the larger wedge. On Friday, the price successfully rebounded off the lower bounds of both wedges, underscored by a hammer candlestick pattern. This indicates that a downward breakout which would normally signal a sell, may not be the preferred path at present.

What's the alternative? A bounce off the lower black line and a breakout above the upper red line. This would imply that the upward trajectory within the larger wedge could continue, at least in the mid-term. For now, our best strategy is patience, as we allow the price to reveal its intended direction. Should ENEL trade above the red lines, we could interpret this as a buy signal, while trading below them would suggest a sell signal.
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