In his second "Executive Decision" segment of Mad Money Thursday night, Jim Cramer again sat down with Nick Akins, chairman, president and CEO of American Electric Power Co. (AEP) , which just posted a 15-cents-a-share earnings beat that sent shares to new highs. Jim also discussed AEP in his Real Money column here.
On the topic of its power generation portfolio, Akins explained that AEP's preferred investment is renewable energy backed up by U.S. natural gas facilities. He said it's possible to generate 40% of its power from renewable sources and AEP continues to make big investments into wind and solar facilities.
Let's check out the charts of AEP to see if the rally is renewable.
In the daily bar chart of AEP, below, we can see a bullish alignment of prices and indicators. AEP has been in an uptrend since early January and there is no sign of a top yet. Prices are trading above the rising 50-day moving average line as well as the bullish 200-day line.
The On-Balance-Volume (OBV) has been moving steadily higher the past year and has made new highs the past two months to confirm the price advance. The Moving Average Convergence Divergence (MACD) has been above the zero line for nearly every day this year and just turned up to a fresh outright buy signal.
In the weekly bar chart of AEP, below, we can see a bullish long-term picture. Prices are above the rising 40-week moving average line and the weekly OBV line shows a matching rise.
The MACD oscillator has been in bullish territory since July of 2018 and it is turning upward now in a fresh buy signal.
In this weekly close only Point and Figure chart of AEP, below, we can see the uptrend and a potential price target in the $108 area.
Bottom-line strategy: Continue to hold longs in AEP and consider adding to that position. Raise sell stops to just below $90 and target $100 and $110 and $130 in the months ahead.