NextEra Energy Gets a Fundamental Supporter

NextEra Energy  (NEE) owns Florida Power & Light Company, which is America’s largest electric utility that sells more power than any other utility. A major sell side firm upgraded the company to an Overweight or Buy recommendation and sees the company as one of the biggest beneficiaries of the Inflation Reduction Act (IRA).

Let’s check out the charts and indicators.  

In this daily bar chart of NEE, below, we can see that prices have traded in a wide sideways range for the past 12 months. Prices have crossed above and below the 200-day moving average line a number of times. Currently NEE is trading above the rising 50-day and the rising 200-day moving average lines.

Trading volume has diminished the past three months and that is not a positive development. I like to see volume expand in the direction of the trend and the trend has been improving since the May low.

The On-Balance-Volume (OBV) line has been neutral since February. The Moving Average Convergence Divergence (MACD) oscillator has turned lower but still remains above the zero line. 

 

In this weekly Japanese candlestick chart of NEE, below, we can see that NEE has traded in a sideways trend the past two years – prices found buying interest in the $70 area and profit taking above $90. An upside breakout over the $90+ area would be very bullish. Prices are trading above the rising 40-week moving average line.

The weekly OBV line shows a positive move from last September and suggests we will see an upside breakout from this consolidation pattern. The MACD oscillator is in a bullish alignment above the zero line. 

 

In this daily Point and Figure chart of NEE, below, we can see a potential price target in the $109 area. 

In this weekly Point and Figure chart of NEE, below, we can see a potential longer-term chart objective in the $118 area. 

Bottom line strategy: Traders could go long NEE on strength above $93 – a breakout on the daily Point and Figure chart.