LNT is an energy stock I have had my eye on for some time, as it’s another of those stocks which have been in congestion for some time, where patience is required, and generally rewarded. The company is Alliant Energy a public utility holding company so perhaps not a stock that is going to set the world on fire, but nevertheless, one which has reached an interesting juncture as of this week on the daily chart.

Until last week, the price had been oscillating around the volume point of control between the $55 per share price and $57 per share, and as a result building, strong levels of price based support and resistance regions on the accumulation and distribution indicator and denoted with the red and blue dashed lines. The stronger these levels then the thicker they are painted by the indicator so giving us a visual and clear pictorial image of these bands and as can be seen on the chart both have been in play over the last few weeks. But it was Friday’s injection of volume that caught my eye delivering some fuel to drive the price away from the VPOC at $56.20 and with yesterday’s price action following through, on reduced volume but taking the price through the red dashed line of resistance at $57 per share and closing at $57.87 on the day.

(Click on image to enlarge)

Charts from NinjaTrader and indicators from Quantum Trading

So the question is where next for this stock and can it recover the highs of earlier in the year at $62.50 and this does indeed look possible for two reasons. First, note the way the VPOC histogram falls away between $58 and $59 per share with a low volume node, and whilst this rebuilds back up to $60 it is considerably less dense than at the VPOC and falls away again as we approach the top of the chart. Second, note the lack of any meaningful price-based resistance ahead – all the dotted lines are narrow so not very strong. Both these factors mean the effort to rise, in other words, volume can be less dramatic if this stock is to recover the $62 per share area in the longer term.