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Where Is Southern Company Stock Headed?

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Moving averages

Southern Company (SO) stock’s 50-day moving average crossed below its 200-day moving average in early August, which is considered a bearish sign. SO rose 1.9% on September 5, 2017, which brought it at par to its 200-day moving average level. It’s currently trading 2% above its 50-day moving average. It should be noted that the weakness in SO might not be over just yet. Southern Company’s 50-day moving average level around $48.06 is likely to act as a support in the short term. It is currently trading at $49.16.

SO dma

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Relative strength index

Although Southern Company’s moving averages show some strength in the stock, its RSI (relative strength index) paints a different picture. On September 5, 2017, its RSI was at 73, the highest in the last 14 days. Southern Company stock seems to have entered the overbought zone and might face some resistance moving forward.

The relative strength index is a momentum oscillator where values above 70 indicate the stock is trading in the overbought zone, while values below 30 indicate the stock is trading in the oversold zone. Extreme RSI values might indicate a possible reversal in the stock’s direction.

Southern Company’s power plant issues significantly brought down its stock after June 2017. It is currently trading 8.5% below its 52-week high of $53.73 and 6.4% above its 52-week low of $46.20.

You can read how utility stocks (XLU) did last week and where they might go from here in Market Realist’s series Last Week in Utilities: Where Utilities Could Go from Here.

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