Where Southern Company Stock Could Go after Its 1Q17 Earnings
Southern Company (SO), one of the largest regulated utilities, has underperformed its peers by a fair margin recently. The stock has managed to gain hardly anything this year, while the Utilities Select Sector SPDR ETF (XLU) has risen 8% so far.
On May 3, 2017, Southern Company stock was trading 1% below both its 50-day and 200-day moving averages. The stock could continue to show weakness until it breaks above both of these moving averages.
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When a stock’s price rises above or falls below a moving average, it’s considered a bullish or a bearish sign, respectively.
Relative strength index
Southern Company’s RSI (relative strength index) stands at 38. 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. Movements above 70 are considered to be in the “overbought” zone and could hint at an imminent reversal in the stock.
Short interest in Southern Company had fallen 7% as of April 13, 2017. The total shorted shares in the company were 24.3 million on March 31, 2017, and 22.7 million by April 13, 2017. This fall in short interest could mean that fewer investors expect the stock to fall from its current levels in the near term.
Short interest indicates the number of a company’s shares that have been sold short and haven’t been covered. The number also helps track investors’ sentiments.