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FirstEnergy’s Key Indicators: Analyzing Recent Changes

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FirstEnergy’s Key Indicators: Analyzing Recent Changes PART 1 OF 4

FirstEnergy Breaks below Support Level, Trades in Oversold Zone

FirstEnergy stock looks weak

One of the biggest competitive utilities, FirstEnergy (FE) fell 2.5% and closed at $30.06 on September 27. US utility stocks (XLU) have been trending downward recently—likely due to the higher possibility of an interest rate hike this year. On September 27, this fall extended after a solid surge in Treasury yields. The Utilities Select Sector SPDR ETF (XLU) fell 1.3% while ten-year Treasury yields rose to 2.33% for the day, the highest level in the last two months.

FirstEnergy’s fall on September 27 pushed its stock below its 200-day moving average levels, which underlines weakness. It’s currently trading 6% and 2% below its 50-day and 200-day moving average levels, respectively.

FirstEnergy Breaks below Support Level, Trades in Oversold Zone

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FirstEnergy stock is likely to trade weakly until it crosses above both these simple moving average levels.

Relative strength index

FirstEnergy’s RSI (relative strength index) currently stands at 17, its lowest level in the last 14 days.

RSI is momentum oscillator, and it takes values between 0 and 100. Values beyond 70 are deemed as the stock trading in the overbought zone while values below 30 are viewed as the stock trading in the oversold zone. RSI at extreme values might hint at an imminent reversal in the stock’s direction.

Short interest

According to a recent report, short interest in FirstEnergy stock rose 26% on September 15. Total shorted shares in FE were 11.6 million on August 31 while they sharply rose to 14.6 million on September 15.

A rise in short interest could imply that more investors expect FE to fall from its current levels.

Short interest shows the number of shares sold short and not yet squared off. It normally denotes investor unease.

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