For his final "Executive Decision" segment of Tuesday's Mad Money program, Jim Cramer checked in with Ralph Izzo, chairman and CEO of Public Service Enterprise Group (PEG) , the utility with a 3.7% dividend yield.
Izzo reiterated that the company will be divesting in the carbon-based generation assets to focus solely on carbon-free assets in the future. One of those assets will be an offshore wind farm in Cape May, N.J.
When asked about nuclear power, Izzo explained that many people fear nuclear plants as they get older, however, plants are constantly being renewed and refurbished to ensure they will continue to run as good as the day they were new.
Izzo also commented on the recent electric grid failure in Texas. He said the Northeast had a similar event with a polar vortex in 2014, but unlike Texas, utilities do extensive winterization of their plants and the grid itself is well interconnected.
Let's check out the charts of PEG.
In the daily bar chart of PEG, below, we can see that prices have weakened since November. PEG is now trading below the declining 50-day moving average line and is also below the cresting 200-day moving average line.
The On-Balance-Volume (OBV) line peaked at the end of November and its subsequent decline tells us that sellers of PEG have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has crossed below the zero line for an outright sell signal.
In the weekly bar chart of PEG, below, we can see a bearish picture. Prices are trading below the 40-week moving average line. The slope of the line is still positive but the underside of the line may act as resistance.
The weekly OBV line shows a peak way back in October 2019. The long decline in the OBV line suggests we have seen some serious liquidation (selling). The MACD oscillator is pointed down toward the zero line.
In this daily Point and Figure chart of PEG, below, we can see a potential downside price target in the $51-$50 area.
In this weekly Point and Figure chart of PEG, below, we can see a price target a little lower in the $48 area.
Bottom-line strategy: While PEG does have an attractive yield, the price chart suggests the stock could weaken further in the weeks ahead. The $50-$48 area may become a better buying opportunity. Wait for the OBV line to turn up.