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Is There Any Steam Left in Southern Company Stock?

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Feb. 12 2019, Published 12:03 p.m. ET

Moving averages

Southern Company (SO) stock is trading at $49.2, which is almost 6% and 8% above its 50-day and 200-day moving average levels, respectively. The strength in the stock is underlined by its fair premium to both of the support levels. Recently, the stock has exhibited a trend of taking a significant bounce from close to ~$43.0 levels. The levels close to $46.5 and $45.7 will likely act as a support for the stock in the short term.

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Relative strength index

Southern Company stock, close to its 52-week high, is trading in the overbought zone with its RSI (relative strength index) at 78. RSI values above 70 suggest that the stock is overbought, while values below 30 suggest that the stock is oversold. An RSI at either extreme suggests that the stock’s direction could reverse.

Short interest

The short interest in Southern Company stock fell 8% as of January 31. The total shorted shares in Southern Company were 22.6 million on January 15, while the total shorted shares decreased to 20.7 million as of January 31. Recently, the short interest in the Utilities Select Sector SPDR ETF (XLU) fell 12%.

A decrease in the short interest could indicate that fewer investors expect Southern Company stock to fall from the current price levels. The short interest is the number of shares that are sold short and not squared off. The short interest measures investors’ anxiety.

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