DUK - AAH! What is happening??

roxythetradermage Updated   
NYSE:DUK   Duke Energy Corporation (Holding Company)
The last week has looked horrendous for shares of Duke Energy (DUK) and the same is true for many other utilities. It seems that every day it just gets sold more, and it has ended up down 10% for the week. This is especially severe since utilities are supposed to be one of the most defensive options - typically these stocks see low volatility and low growth.

As of now, it appears to be in free fall. What levels can we look to?

As you can see on my chart, the $86 level seems obvious and crucial - it has served as significant past support and resistance. What typically happens in these situations is that the share price will go slightly below the key support level and then rebound, so it may be a buying opportunity if it starts stalling out around there. Below that there's an assortment of other strong levels.

I also want to mention the $100 level, which is a major psychological level and support. It's probably well past there now at $93, but if it were to rally immediately there's a possibility it retakes that level quickly.

For the moment, you can try following the downward trend, but this decline seems more dependent on the broader market index. If that were to end, you can generally expect utilities to rebound.

If you feel like buying utilities for the long term, this may be the place to start buying!
DUK has reached the first of the major support levels I set and has bounced (at least for now) with a bullish rejection set of candles. It did this after a few days of consolidation near $89.

To me, this looks like a great entry because it spends so little time at the lows whenever it bounces. It probably has enough momentum to move back up towards $100, but watch out for $97 too.
Unlike the utility index, DUK has held up reasonably well throughout the utility drawdown and is now back to the $88 range. It's possible that it stays at these levels for somewhat longer this time around, so I wouldn't buy more immediately. Patience is key!

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