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Duke Energy Stock Is at Its Most Oversold Level in 5 Years

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Jan. 22 2018, Published 11:47 a.m. ET

Relative strength index

Broader utilities (XLU) (IDU) have been falling almost every day so far in 2018. The second-largest utility by market cap, Duke Energy (DUK), has been on a similar downtrend in this period. In the last month, DUK has fallen nearly 12%.

Duke Energy stock is currently trading deep in the oversold zone with an RSI (relative strength index) of 5. DUK hasn’t seen such oversold levels in the last five years. An RSI at such a low level could trigger a reversal in the stock’s direction.

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Moving averages

On January 18, 2018, Duke Energy stock was trading 10% below its 50-day and 200-day moving averages. The huge discounts to both the stock’s key moving averages suggest underlying weakness in the stock. The price level of ~$85.5 could act as a resistance for Duke stock going forward. The stock may continue to trade weakly until it stays below its moving averages. It’s currently trading at $77.3.

Short interest

Short interest in Duke Energy stock fell 6% on December 29, 2017, according to a recent report. The total number of shorted shares in DUK was 8.7 million on December 15, and shorted shares fell to 8.1 million by December 29, 2017. The fall in the stock’s short interest could mean that fewer investors are expecting it to fall from its current level.

Short interest represents the total number of a company’s shares that have been sold short and haven’t yet been covered back. The metric tracks investor anxiety.

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