2 Utility Stocks That Could Go Dark This Quarter

ETR and EXC shares both have been moving higher since February bottoms

Josh Selway
Oct 3, 2018 at 12:44 PM
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The technical picture for electricity stocks has been rather upbeat, according to Schaeffer's Senior Quantitative Rocky White's internal sector scorecard. For example, 69% of the stocks that fall in White's "electricity" sector are trading above the 80-day moving average, with an average year-to-date advance of 13%. Looking closer at this group, however, traders may want to keep a cautious eye on Entergy Corporation (NYSE:ETR) and Exelon Corporation (NYSE:EXC), as both these stocks are facing unfavorable seasonal headwinds.

Starting with ETR shares, they have only had two positive fourth quarters over the past 10 years, and on average have ended the three-month period with a loss of 4.9%. Looking at more recent trading action, the stock has been stair-stepping higher since its February bottom near $72, last seen at $81.16 -- right near its year-to-date breakeven level. Entergy also just bounced near the site of its 200- and 320-day moving averages.

etr stock chart

As for the sentiment around the equity, a slim majority of analysts recommend buying it. Meanwhile, the average 12-month price target stands up at $87.82.

Turning to EXC, the shares have only enjoyed a positive fourth-quarter finish twice in the past 10 years, as well, and their average loss has also been 4.9%. However, the stock has been strong since its own February bottom, jumping from $35.57 to today's perch at $43.54, recently seeing strong support from the 100-day moving average.

exc stock chart

The sentiment scene for Exelon is also similar to its sector peer, with seven of 13 covering brokerage firms handing out "strong buy" ratings. Moreover, the consensus 12-month price target is not too far overhead, sitting at $45.83.

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