Hydro One is an electricity transmission and distribution utility serving the Canadian province of Ontario. Currently, Hydro One is trading at historic lows since its IPO. The underlying trend is bearish , while the chart pattern is Broadening Bottom. At this point the price can go either way. Currently, the support is being tested at the trendline (Dividend is around 4.4%). If price drops further (below CAD $20, then the probability that the price may go down further increases. However, if price does not drop further within the next few days, this is an excellent entry point as the probability of a price rise after an broadening bottom with an underlying bearish trend is over 50%.

The elections in Ontario (to be held in June) will be a critical factor in determining the mid to long term outlook for the stock. Currently, all parties (political) do not want the price of electricity to go up (the government is a large shareholder of the utility). However, after the elections these poll pledges might disappear as energy prices across all sectors tend to rise (especially during the summer months).


The stock price has broken through the key support level and is therefore in the bearish territory. RSI indicates tat Hydro One is oversold. However, I would wait till the elections to buy into the stock or until the price movement confirms a reversal.