Last year at this time, US electric utilities stocks had started gaining some momentum and later beat the broader markets. So far, 2017 has been relatively slow for them as the increased possibility of another interest rate hike looms over the industry.
One of the largest utilities by market capitalization, Southern Company (SO) is currently trading 2% above and 2% below its 50-day and 200-day moving averages, respectively. Both levels may now act as respective support and resistance factors in the short term. The stock may turn bearish if it breaks below its 50-day moving average level.
Moving averages show that when a stock rises above a particular moving average, it’s a bullish sign. When it falls below that average, it’s a bearish sign.
Relative strength index
Currently, Southern Company’s (SO) RSI (relative strength index) stands at 50. The relative strength index is a momentum indicator made up of values between 0–100. Movements below 30 are considered in the “oversold” zone. Movements above 70 are considered in the “overbought” zone. They can hint at an imminent reversal in the stock’s price.
In comparison, SO’s peer Duke Energy (DUK) is trading at 2% above and 1% below its 50-day and 200-day moving averages, respectively. Duke Energy’s RSI is near 50. Duke Energy stock has been trading in a narrow range in the last several trading sessions.
In the next article, let’s see how Southern Company is valued.