Shares of FirstEnergy (FE) have been in a relentless decline for much of this year, but in the past three months a turnaround has been underway.
In this daily chart of FE, above, we can see the beneath-the-surface improvement in the technical condition of FE. Though prices have made lower lows, we can see a bullish divergence between the price action and the momentum study making higher lows from September to November. Prices have rallied above the 50-day moving average and the slope of the moving average is now positive. The rally has almost reached the 200-day average. The On-Balance-Volume (OBV) line has improved in November, signaling fresh accumulation.
This second chart, above, is a weekly view of FE. The chart shows that the downtrend has been in force for nearly three years, but we are near the declining 40-week moving average. The OBV line is neutral and the trend-following Moving Average Convergence Divergence (MACD) oscillator is crossing to a "cover shorts" signal. While this may not sound like a table-pounding recommendation, FE may surprise on the upside with a rally that carries into the new year. Our first upside price objective is $36.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
That word of warning applies to ETFs and individual stocks such as Intercept Pharmaceuticals, which we outline a trading strategy for here.
Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation.
If you have questions, please contact us here.
Email
Email sent
Thank you, your email to has been sent successfully.
