Today’s trade idea looks to be a bit longer of a play then we usually highlight, as the hold time could be a few months, however the return could be greater as a result of the longer wait. NextEra Energy Inc. (NYSE:NEE) has already been in a strong uptrend for 16 years, so betting on the future direction of the stock is not too difficult if you understand the first rule of technical analysis, which is the trend is your friend. However looking at a shorter term chart, the stock had been in a trading range since early 2015, but over the last few weeks, the bulls took control and sent this stock past a key resistance level.
As mentioned, a key resistance level which would now be a support level at $108 - $109 held the stock down for a year, but the last few weeks saw strong momentum and a break of that key level. Looking upward, there is no real resistance in place as the stock trades at all time highs. That being said, key psychological levels such as $120 and $130 will likely be areas of future resistance. Looking at support, the main area to watch on weakness is the key level at $108 - $109.
Our trade strategy would be to enter the stock on strength over the next couple of days. Upon a successful entry, we would place our stop loss level at $108 to ensure limited downside risk. On the up side, we would be holding onto shares and likely looking to liquidate them at the $130 level. Based on today’s prices, our upside potential is 12.7%, while our downside risk is 6.4%.
The stock price direction for the day for NEE is UP. This stock is currently not trending in any direction or the stock may be fluctuating over the last 5 to 7 days, but after all the fluctuations, finds itself in roughly the same price point as it did when BullishInvestor.com started analyzing it 7 days earlier. As a result, the trend for this stock is too weak to properly analyze at this time. That being said, short spurts of share price increases or decreases can still occur even though a trend has not been properly analyzed which is why watching the BullishInvestor.com daily ratings may be able to pinpoint quick entry and exit levels in this stock. Based on BullishInvestor.com’s proprietary algorithms, NEE is currently signalling NEUTRAL.
The most recent Candle Stick pattern for NEE is the Belt-hold.
There are two possible reasons for the Hold rating currently given to NEE. The first reason is that there may be indecision among the technical indicators or most of them may be neutral for NEE. If the stock chart looks flat lined or is in the midst of a trend direction change, most likely this is why NEE is showing Neutral. If, however the stock is currently in a visible up or down trend, the reason for the Hold may be because the BULLISH or BEARISH rating has already passed.
The last BUY was registered on Apr 17, 2024 when NEE was trading at $ 63.79. Armed with this knowledge, there may still be some more strength left in this current trend or it may be near a tipping point, the market has not given a clear indication yet.
As such, it may be a wise decision to hold your stock or continue to wait on the sidelines in NEE until BullishInvestor.com changes the rating for NEE.