Utilities stocks are often among the most overlooked in the
stock market. But with their typically sizable dividends and
history of relatively low volatility, utilities stocks may be worth
a look at profit-taking in the sector has many major utilities
stocks trading at a discount.
) have pulled back for two out of the last three days, selling off
by more than 1% on Friday. The correction in SO takes the stock to
near, two-week lows, and returns Southern Company to a trading
range that extends back to early February.
With a short-term positive edge of less than half a percent, and
6 out of 10, ratings
, Southern Company may have further to fall before traders are
sufficiently convinced to re-enter the market on the buy side. The
last time SO traded technically oversold was in early January when
a five-day slide led to a rally that took Southern Company to new,
two-week highs just seven days later.
Pulling back from new, 52-week highs reached at the beginning of
) has come under aggressive selling, closing lower for the last
four days in a row. Newly oversold above the 200-day moving
average, shares of Nisource earned a one-point ratings upgrade
early in trading on Friday, and has a short-term, positive edge of
just under half a percent.
The last multi-day
in Nisource led to exceptional gains in a very short period of
time. Selling off for five days in a row in the first half of
February and finishing in oversold territory, shares of Nisource
closed higher by 1% the first day afterward and bolted higher by
another 2% on the second day.
Down three in a row and breaking down below a trading range that
extends back to mid-February (and arguably to early January, as
well), shares of
Consolidated Edison Inc.
) are now trading at their lowest level since the fall of 2011. The
sell-off in the stock has earned Con Ed a
in the short-term of more than a third of a percent, and a neutral
rating of 6 out of 10.
Consolidated Edison was last trading in oversold territory a
month ago. Then, a retreat that featured two oversold finishes, and
three lower closes out of four, was followed by a rally that
returned ED to near, new two-week highs after a gain of more than
Traders who want to take advantage of weakness in the sector,
but also want to steer clear of single stock risk, may want to
consider the short-term oversold conditions in the
Utilities Select Sector SPDRS ETF
). Shares of XLU have closed lower for three days in a row, all
three in technically oversold territory, and have a positive edge
in the short-term of three-quarters of a percent.
When traded correctly, ETF Gap Trading can be one of the most
consistent strategies available for your trading.
to learn more.
is Editor in Chief of TradingMarkets.com