Utilities Show Signs of Power

• Posted by Greg Harmon
• on February 7th, 2012

Does it surprise you that as the broad indexes are making new highs, utilities are starting to look attractive again? It shouldn’t. After massive runs higher through 2011 they have all corrected back toward their 50 and 100 day Simple Moving Averages through a combination of price pullbacks and time. This has also left many of them sporting dividend yields over 4% again. Whether these foretell of a market pullback or just a rising tide lifting all boats, they provide a good core to your portfolio. Here are 3 that are ready to head higher.

American Electric Power, $AEP

American Electric Power, $AEP, was nearly 10% above it’s 100 day Simple Moving Average (SMA) at its peak on January 1. Now it has pulled back between the 50 and 100 day SMA’s and is building a base. Tuesday it printed a strong bullish candle and it has support for more upside from a Relative Strength Index (RSI) that has turned back higher and an improving Moving Average Convergence Divergence (MACD) indicator. The dividend yield on this one is currently 4.7%.

Consolidated Edison, $ED

Consolidated Edison, $ED, was also 10% above its 100 day SMA at one point, but has corrected to between the 50 and 100 day SMA’s. It’s MACD has been improving since mid January and is about to cross bullishly positive while the RSI is testing the mid line after never falling bearish. A close look shows that the Bollinger bands are starting to expand to allow continuation of the move high started Tuesday. The dividend yield on this one is 4.1% for now.

Hawaiian Electric Industries, $HE

Hawaiian Electric Industries, $HE, did most of its correcting through time and is already starting to move higher, after a nearly 6% pullback. The RSI on this name is bullish and rising and the MACD is positive and slowly growing. The Bollinger bands have opened here and it is moving higher with a strong bullish candle Tuesday. Despite the early move it still has a dividend yield of 4.8%.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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