On July 15, 2016, NextEra Energy (NEE) was trading at a 4% and 14% premium to its 50-day and 200-day moving averages, respectively. The strong premium over both faster and slower moving averages indicates strength in the stock. If NextEra stock breaks below these levels, then it may indicate a possible trend reversal.
NextEra’s RSI (relative strength index) is currently at 55. The RSI is a momentum indicator made up of values between zero and 100. Movements below 30 are considered to be in the “oversold” zone, and movements above 70 are considered to be in the “overbought” zone. Let’s discuss total returns of utilities (XLU)(IDU) in the next part of this series.