AYE – Allegheny Energy Incorporated $47.50 +0.38 (+0.50)
The state-by-state restructuring of the electric utility industry
offers a rare opportunity to build a major independent power-
producing businesses. Just a handful of companies are poised to
benefit from this transformation, of which Allegheny is
certainly one. To take advantage of the rollout, AYE is seeking
to achieve critical mass through a combination of new energy
plants and the transfer of existing generating operations to
unregulated status. We’re expecting this positive news to propel
AYE shares higher. But we're not counting only on news.
Looking at the chart, AYE appears to be gaining momentum off
its recent low. The short-term technical indicators also point
to higher levels, with the MACD flattening out after the recent
decline and the stochastic showing a bullish crossover. With
that said, we’ll look for initial resistance to come at the $49
mark (all time high), followed by a more difficult test at $50.
Support will come at the 20-dma of $47.06, with an additional
base at the March 6 intra-day low of $46.43. Look for entries on
bounces off support or a break above $49 on volume of at least
300,000 shares traded by noon.
Picked on February 22nd @ $48.22
Change since picked –0.72
Stop Loss @ $45.94
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