Investors rushed back to safe-haven utilities (XLU) last week when the Fed kept the interest rates unchanged. Almost all the utilities rallied in reaction to the news and broke their two-month-long weak phase. As of September 27, 2016, Southern Company (SO) was trading at a 1% and a 5% premium to its 50-day and 200-day moving averages, respectively. If Southern Company continues to trade above its 50-day moving average, it could be an indicator of the stock’s strength.
Peer Duke Energy (DUK) is currently trading at par to its 50-day moving average and at a 5% premium to its 200-day moving average. PPL (PPL) is trading at the same levels as its 50-day moving average and at a 3% discount to its 200-day moving average. When a stock price exceeds or falls below a particular moving average, it’s a bullish or bearish sign, respectively.
Relative strength index
Currently, Southern Company’s RSI (relative strength index) stands at 56. RSI is a momentum indicator made up of values between zero and 100. Movements below 30 are considered in the “oversold” zone. Movements above 70 are in the “overbought” zone.
According to a recent report, short interest in Southern Company has risen slightly by 1.4% as of September 15, 2016. Total shorted shares in Southern Company were 14.9 million at the end of August, while they rose to 15.2 million as of September 15, 2016. The increase in the short interest may mean that investors are hoping the stock will correct in the near term.