For his second "Executive Decision" segment of Mad Money Monday night, Jim Cramer spoke with Nick Akins, chairman, president and CEO of the utility American Electric Power (AEP) .
Akins said that AEP continues to invest to meet the changing needs of our economy. He said power generation has always been a capital-intensive business and with the pandemic, that trend only continues. Since Covid-19 began, Akins said power demand for residential has increased as people spend more time at home, while commercial and industrial demand has plunged. As we move into 2021, Akins said he expects both of those trends to moderate and overall demand for power to increase.
When asked about the upcoming election and how it affects their planning, Akins explained that their shareholders and customers expect a clean energy utility and they continue to focus on adding more renewables to their portfolio.
Let's check out the charts.
In this daily bar chart of AEP, below, we can see that prices broke out on the upside this month, breaking above the highs of July. Prices are trading above the rising 50-day moving average line and above the bottoming 200-day moving average line.
The On-Balance-Volume (OBV) line improved from September to October but is not super strong and has not (yet) broken above its July high.
The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but has narrowed close to a bearish crossover.
In this weekly bar chart of AEP, below, we can see the upside breakout as prices trade above the declining 40-week moving average line.
The weekly OBV line only shows modest strength from late August.
The weekly MACD oscillator is crossing the zero line now for a buy signal.
In this daily Point and Figure chart of AEP, below, we can see the upside breakout and that prices have met and exceeded an $87 price target.
In this weekly Point and Figure chart of AEP, below, we can see a longer-term price target in the $124 area.
Bottom line strategy: Traders could approach AEP from the long side on a shallow dip risking a close below $86. The $125 area is our tentative price target.
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