Stock of the day: ENEL

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.