AES at four-year high

AES Corporation (AES), one of the smallest constituents of the Utilities ETF (XLU), has surged more than 35% so far this year, beating peers. The stock is currently trading at its four-year high. Its expansion of renewable energy sources and its recently launched LNG terminal in Central America have driven its stock so far this year. Let’s see where AES might go in the near future.

Is There Any Steam Left in AES Stock after Such a Steep Rally?

Chart indicators

AES stock presently looks strong considering the premium to both its support levels. It’s trading at $14.84, almost 7% above its 50-day and 20% above its 200-day moving average level. Both these levels of around $13.86 and $12.38 are expected to act as a support for the stock going forward. AES stock has rallied more than 26% since we discussed bullish signals for the stock in an article on May 9.

AES stock is currently approaching the overbought zone with its RSI (relative strength index) at 69. A stock is considered oversold when its RSI falls below 30 and overbought when it rises above 70. Extreme RSI values suggest an impending reversal in a stock’s direction.

Short interest

The short interest in AES stock increased a notable 20% on September 28. On September 14, the shorted shares in AES were 14.3 million. AES’s total shorted shares increased to 17.2 million on September 28.

A notable rise in AES’s short interest could mean that more investors expect it to fall from the current price level. The short interest indicates the number of a company’s shares that have been sold short and not squared off yet.

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