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Southern Company's Struggle: An Investor's Pespective

PART:
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Part 2
Southern Company's Struggle: An Investor's Pespective PART 2 OF 7

Inside Southern Company’s Latest Chart Indicators

Chart indicators

Southern Company’s (SO) chart indicators appear stable right now. On April 7, 2017, the stock was trading on par with its 50-day moving average and 1% below its 200-day moving average. The stock had turned weak in the previous few trading sessions, correcting a few percentage points due to its Kemper County and Vogtle nuclear plant struggles.

But now that the stock is trading on par with its 50-day moving average, its movement could be considered crucial going forward. Levels near $49.65 may now act as a support in the short term, while its 200-day moving average level (near $50.40) may act as resistance soon.

Inside Southern Company’s Latest Chart Indicators

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It should be noted that, when a stock price rises above or falls below a moving average, it’s considered a bullish or bearish sign, respectively.

Relative strength index

Southern Company’s RSI (relative strength index) now stands at 40, which is nearing the “oversold” zone. The RSI is a momentum indicator made up of values between 0 and 100. Movements below 30 are considered to be in the “oversold” zone, whereas, movements above 70 are considered to be in the “overbought” zone and could hint at an imminent reversal in the stock.

SO stock has done relatively poorly compared to other utility giants. It has fallen 2% in the past year, while peer Duke Energy managed to gain more than 3%. But renewables titan NextEra Energy (NEE) has outwitted peers by soaring 11%, as compared to the Utilities Select Sector SPDR’s (XLU) rise of ~5% during the same period.

You can read more about NextEra Energy in Market Realist’s series NextEra Energy’s Oncor Deal Hits a Roadblock.

Continue to the next part (below) for a look at SO’s current valuation.

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