• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Utilities

American Electric Power May Weaken Even Further

AEP began to decline in November.
By BRUCE KAMICH
Mar 04, 2021 | 12:35 PM EST
Stocks quotes in this article: AEP

For his final "Executive Decision" segment of Wednesday's Mad Money program, Jim Cramer spoke to Nick Akins, chairman, president and CEO of his favorite utility, American Electric Power (AEP) .

Akins noted that extended weather events like that in Texas test electric systems. As generation plants froze and left the grid, operators had no choice but to shed load in order to compensate, leaving millions in the dark.

Electrical systems need resiliency, they need reserves and they need weatherization, Akins continued. But most importantly they need market structures willing to pay for that resiliency. In Texas, there were no incentives to maintain a resilient grid.

Turning to AEP's business, Akins said that residential load continues to be strong, but they're beginning to see the signs of a recovery in industrial and commercial load, which they would expect to see as the economy reopens.

Finally, when asked about renewable energy, Akins said more and more, large companies are asking for clean, renewable power and AEP is happy to deliver. They're supporting the transition to electric vehicles both with upgrades to the grid and also with charging station partnerships.

When we last plugged into the charts of AEP on Oct. 27 we wrote that, "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." Unfortunately AEP began to decline in November and would have stopped out traders with a loss by mid-month.

Let's check the AEP charts again.

In the updated daily bar chart of AEP, below, we can see that the shares have been in a downtrend since their small double top in October/November. Prices are below the declining 50-day moving average line as the bearish 200-day line.

The On-Balance-Volume (OBV) line has been weak since the middle of October and tells us that sellers of AEP have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has been below the zero line in sell territory since late November.

In the weekly bar chart of AEP, below, we see a bearish setup. Prices are in a downtrend below the declining 40-week moving average line.

The weekly OBV line has struggled since its peak in January 2020. The MACD oscillator is bearish.

In this daily Point and Figure chart of AEP, below, we can see a potential downside price target of $70.

This weekly close-only Point and Figure chart of AEP, below, is projecting a downside price target in the $59 area.

Bottom-line strategy: The charts and indicators of AEP point to lower prices ahead. Avoid the long side for now despite the attractive yield.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Dividends | Economy | Investing | Technical Analysis | Utilities | Mad Money | Executive Interview

More from Utilities

National Fuel Gas Sends Bullish Signals Ahead of Earnings

Bruce Kamich
Aug 4, 2022 7:54 AM EDT

The charts of the diversified energy company tell a positive tale in advance of its fiscal third-quarter results.

American Water Works Appears 'Head and Shoulders' Above Other Charts

Bruce Kamich
Aug 3, 2022 1:05 PM EDT

Let's check the anatomy of this compelling chart that reveals why AWK is poised for an upside breakout.

These 3 High-Dividend Canadian Stocks Are Worth a Look

Bob Ciura
Jun 11, 2022 12:00 PM EDT

We like Canadian stocks for their relatively low valuations compared to US peers.

Constellation Energy Could Power 20% Higher From Here

Bruce Kamich
May 20, 2022 7:34 AM EDT

Shares of the clean energy power generator have rallied since going public in January.

American Electric Power Could Correct Lower

Bruce Kamich
May 10, 2022 8:07 AM EDT

Let's see what the charts and indicators look like.

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

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 08:44 AM EDT PETER TCHIR

    CPI Beats Expectations, But Maybe Not the 'Whisper'?

    Slightly better-than-expected inflation across the...
  • 01:44 PM EDT STEPHEN GUILFOYLE

    This Holding Lights Up With Strong Earnings

    Check out the latest from TheStreet's Stocks Under...
  • 09:24 AM EDT PETER TCHIR

    Jobs Report Reaction: Incredibly Strong, But Questions to Ask

    An incredibly strong July jobs report. Not only d...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login