Center Point Energy (CNP) started the new year with a nice rally, which looks like it can continue.
CNP has been making a bottom pattern the past six months, and broke out on the upside earlier this month. Notice the "neckline" just above the $19 zone. CNP is now above the rising 50-day moving average and the still-declining 200-day average. The On-Balance-Volume (OBV) line has been going up strongly since December and the momentum study is not diverging from the price action. All good.
This longer-term chart, above, of CNP is also encouraging to the bulls. The shares have rallied and stayed above the 40-week moving average for several weeks. The OBV line is in its third month up on this weekly timeframe, as buyers are more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has generated a "cover shorts" buy signal, and is almost back above the zero line for an outright buy signal. CNP does not encounter overhead resistance until around the $24 to $25+ area, so we have room to advance. CNP is a little extended in the short run, so traders may want to wait for a pullback to $20 before probing the long side.