Publishing an update to an unsuccessful projection with
NEP
last month. It was sitting at the 200MA and it's most recent drawdown had triggered a fear signal. These are less common in the utilities sector, which made it look like a decent contrarian opportunity. Throughout the remainder of March we saw a rotation out of safety sectors like utilities and staples into growth sectors like tech and discretionary, and NEP fell another 13% (wicking below where I would normally place my stop loss).
This is an interesting price point for NEP. It's at the center of its long term channel, with the lower band of the channel historically being tested during broad market drawdowns. Earnings are coming up this month and NEP has a history of slight increases after both earnings beats and misses. We see a recent lower low (not good) but bullish divergence between RSI and price (good). Additionally, when a major support level like the 200MA fails that level typically becomes overhead resistance, so any favorable opportunity here will likely be brief.
While NEP and utilities may experience continued downtrend if the broader market continues to favor growth, an entry here with profit taking at the 200MA will represent a good opportunity to accumulate. I only follow this strategy for positions that I plan to hold for the long term. The next major support level below this is ~$52.50
NEE
XLU
NEP
last month. It was sitting at the 200MA and it's most recent drawdown had triggered a fear signal. These are less common in the utilities sector, which made it look like a decent contrarian opportunity. Throughout the remainder of March we saw a rotation out of safety sectors like utilities and staples into growth sectors like tech and discretionary, and NEP fell another 13% (wicking below where I would normally place my stop loss). This is an interesting price point for NEP. It's at the center of its long term channel, with the lower band of the channel historically being tested during broad market drawdowns. Earnings are coming up this month and NEP has a history of slight increases after both earnings beats and misses. We see a recent lower low (not good) but bullish divergence between RSI and price (good). Additionally, when a major support level like the 200MA fails that level typically becomes overhead resistance, so any favorable opportunity here will likely be brief.
While NEP and utilities may experience continued downtrend if the broader market continues to favor growth, an entry here with profit taking at the 200MA will represent a good opportunity to accumulate. I only follow this strategy for positions that I plan to hold for the long term. The next major support level below this is ~$52.50
NEE
XLU