SO - poised for another big move up or climactic top?

29 Ara 2019

After trading mostly sideways for the better part of 2018 (effective range between $50 on the upper end and $42/$43 on the low end), SO eventually confirmed the bottom was in place and has gone on to gain roughly 45% YTD in 2019 (impressive rip for a utility). So, is this the end of the rally or just a breather before another leg up? Since the beginning of Q4 SO has essentially consolidated sideways between $60-$63. In early December it looked as if the stock was preparing to leg down as volume expanded and price closed at the lower end of the range; not to mention, a new low was printed the week starting 12/9. However, this new low looks to have been a false break as both volume and price expanded nicely and SO closed out and above the trading range. In fact, the weekly volume on this move was the largest since the bottoming process in 2018. The question at hand is this: are we witnessing a huge swoon in demand which is just the beginning of more bullish behavior in the future? Or, are we in the midst of a climactic volume peak and just beginning to put in a top? Last week's low volume, inside bar was actually a retest of the breakout and previous highs of the consolidation which lends itself well to the bullish picture. But, if indeed this is another leg up we will need to see continued demand and price expansion up and away from this zone. If, on the other hand, price reverses and closes back inside the previous consolidation, we could be seeing a subsequent false break to the top and eventual topping process. I'm leaning to the bullish side but with cautious optimism. Given that utilities, in their nature, are slower moving vehicles we will likely need weeks to see this unfold but opportunities are at the taking in either event. Another bullish bar on strong demand (wide price range, increased volume, strong close) will warrant a long; a strong reversal and close near the bottom on increased volume would lend itself to a potential short. Continuing to monitor this, will revert back.