In his second "Executive Decision" segment of Mad Money Wednesday night, Jim Cramer welcomed back Nick Akins, chairman, president and CEO of American Electric Power Co. (AEP) . The utility's shares are up around 3% for the year as Wall Street has been attracted to other sectors.
Akins said it's been another great year for AEP, both in terms of weather and because of the growing economy. While tariffs and trade have slowed some sectors, most of the U.S. economy continues to advance in many ways. Akins said extreme cold snaps, like the one currently gripping most of the country, keep the meters turning and electrical loads increasing. Overall consumption is there, he said, and the grid is in great shape to handle it.
Turning to electric vehicles (EV), Akins said there are one million EVs on the road today, with estimates of 18 million by 2025. AEP will continue to be a part of that transition, he said, both in terms of charging and storage capacity.
How do AEP's charts look? Let's check.
In the daily bar chart of AEP, below, we can see that the share price has rallied from a June low. Prices made a limited pullback into late December/early January before firming again. AEP is above the rising 50-day moving average line and the bullish 200-day average line.
The daily On-Balance-Volume (OBV) line made a new high for the move up this month and is leading the price action. The OBV line can be coincident to market moves both up and down but the OBV line can also lead the price action. It is not unusual to see the OBV line break out before prices break out.
The trend-following Moving Average Convergence Divergence (MACD) oscillator recently crossed above the zero line for an outright go long signal.
In the weekly bar chart of AEP, below, we can see that our favorite technical indicators show a bullish alignment. Over the past three years AEP shows a pattern of higher lows and higher highs -- the simple definition of an uptrend. Prices are above the rising 40-week moving average line.
The weekly OBV line shows a positive pattern it is close to a new high for the move up. A new high in this indicator would confirm the price strength so far and foreshadow additional gains ahead.
The weekly MACD oscillator crossed to a take profits sell signal in December but it has since narrowed and could soon cross upward to a fresh outright buy signal.
In this Point and Figure chart of AEP, below, we can see an uptrend from late 2016. A longer-term upside price target of $87.64 is being projected. A trade at $81.44 would be a double-top breakout.
Bottom-line strategy: Investors looking for yield and price appreciation could go long AEP at current levels and on any shallow dip. Risk below $72, the recent low, and look for new highs later in the first quarter. Our Point and Figure price target is $88.
