American Electric Power to the Market

• Posted by Greg Harmon
• on October 8th, 2014

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Odd how 3 weeks after the FOMC meeting, and one where there was a press conference following the statement, the market decides to turn around and move hard to the upside. You never know what will happen. In times like these you would expect a shift from defensive assets into more aggressive ones at the margins. And many of the momentum names are benefiting form that move. But there is one stock you might not expect that is set up for a break out.

American Electric Power (full disclosure my power provider) had a good move off of a bottom it made in early August. But on a day where the S&P 500 reversed and moved over 40 points higher, it also rallied. It sits now at resistance of an ascending triangle at 53.80. A move over the top would carry a target of 58.40. But it is not only the price that is moving counter to conventional wisdom Wednesday. The Bollinger bands are opening to the upside to allow a move, and the momentum indicator is making a 3 month high as it probes into the bullish zone. These support more upside. A utility rallying with the broad market and with a 3.8% dividend yield. Why don’t you own this already.

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