forever_green

Hurry Up and Wait on SO

Short
NYSE:SO   Southern Company (The)
***None of my ideas, this on included, are financial advise. Tread cautiously. Markets are know to enjoy punishing the un-wary.***

Previous Idea, Profit, and Short-term Movement
I've shared a couple ideas on Southern Company and thus far the stock movement has been very predictable; moving around earnings and payouts. Based on my previous idea (linked), I just made a nice profit on Feb 2022, $65 strike calls for SO. I think from here we'll move back to near fair value ($60-$61) over the next month or two. This is a good place to enter a short position. I don't like buying puts as risk is high but a covered call would be an acceptable position, in my view.

Catalyst for Change
My belief is this equity will move as it has for the past year-and-a-half until the Fed tapers bond purchases. I believe once a taper is announced there will be a flight to blue-chip/high capital asset companies (like SO and other utilities). This may manifest as an increase in price of SO stock that breaks its recently established trend. (for example, see price action from late 2018 to early 2020).

Lifetime Valuation
This should not be construed as a bearish flag on SO's stock, overall. This idea only shares my thoughts on the probable trajectory of the stock in the short term. My overall valuation on this company is very bullish ; specifically given the considerable upside with their Vogtle nuclear project.

Disclaimer

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