Where Southern Company Stock Could Go from Here
Atlanta-based Southern Company (SO) witnessed its stock performance drop in the last few months due to issues with its power plants. Meanwhile, on a YTD (year-to-date) basis, Southern Company stock has gained just 1%, while the Utilities Select Sector SPDR ETF (XLU) has risen more than 6% so far this year.
The SPDR S&P 500 ETF (SPY) (SPX-INDEX) has gained 5% over the same period. Notably, the utility sector forms 3.2% in SPY.
Interested in XLU? Don't miss the next report.
Receive e-mail alerts for new research on XLU
SO stock crossing below its 50-day moving average (or DMA), which can be considered a bearish sign going forward. On April 13, 2017, the stock was trading marginally below its 50-DMA and 1.3% below its 200-DMA. Investors may expect a bullish trend to return to Southern Company stock if it crosses above both DMA levels.
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 38, which is nearing the “oversold” zone. The RSI is a momentum indicator made up of values between 0–100. Movements below 30 are considered 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.