American Electric Power (AEP) was favored by Jim Cramer last night in his spirited "Lightning Round" on "Mad Money". Let's take a look at the charts and indicators this afternoon.
In this daily bar chart of AEP, below, we can see that prices have been trading in a small broadening pattern since late June. Prices have been trading up and down in wider swings. Prices are currently between the rising 50-day average line and the declining 200-day line.
While prices have been trading sideways around $71, the daily On-Balance-Volume (OBV) line has been strong from early June, and tells us that buyers of AEP have been more aggressive the past four months.
The Moving Average Convergence Divergence (MACD) oscillator is poised to move above the zero line for a new buy signal.
In this weekly bar chart of AEP, below, we can see that prices are above the declining 40-week moving average line.
The weekly OBV line is generally constructive and the MACD oscillator has narrowed but may not cross to a sell signal.
In this Point and Figure chart of AEP, an $87.67 price target is being projected.
Bottom line strategy: A nice dividend and a stock that could rally in the months ahead. Sounds like a great combination. Go long above $74.
