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- 1 AEP stock bounced and is attempting to escape the 20 day EMA.
- 2 Buyers are gaining momentum and are looking to surpass the $75 level.
American Electric Power Company (AEP stock) is inside the falling parallel channel and is close to the 20 day EMA, where bulls are trying to sustain above it to extend the rebound. Meanwhile, sellers have grabbed the region tightly and did not permit the bulls to escape the barrier landing bulls in trouble. Moreover, the price action shows a downtrend and AEP share price lost more than 25% of the gains from the last quarter and is still struggling to retain the gains delivering the bears dominance. In 2023, Q1 and Q2 earnings, were below the estimates and the bear cartel was again ready ahead of the Q3 results and started making short positions which floated a negative sentiment.
AEP stock is below neutrality and is close to the 38.2% Fib zone which if broken, the downfall will expand to the demand zone of $60. However, the options chain shows that, at the strike price of $75, put writing of 2370 hundred shares in front of 1117 hundred call writing, gives a strong conviction that buyers are trying to surpass the barrier and are looking to fly above the 20 day EMA. Per the options chain, long buildup was witnessed based on the addition of open interest and suggests that bounce will extend to $80 in the next sessions.
At press time, AEP stock price was $74.74 with an intraday gain of 1.90% showing neutrality on the charts. Moreover, the trading volume increased by 0.34% to 3.16 Million while the market cap is $38.504 Billion. Furthermore, analysts have maintained a buy rating with a yearly target price of $88.70 suggesting a growth outlook.
American Electric Power Co., Inc. engages in the generation, transmission, and distribution of electricity. It operates through the following segments: Vertically Integrated Utilities, Transmission and Distribution Utilities, AEP Transmission Holdco, and Generation and Marketing. The Vertically Integrated Utilities segment covers the generation, transmission, and distribution of electricity for sale to retail and wholesale customers. The Transmission and Distribution Utilities segment represents the transmission and distribution of electricity for sale to retail and wholesale customers.
Will The Rebound Extend Toward $80?
On the daily charts, AEP stock price is trading inside the falling channel and has persisted in forming the lower lows for the past sessions. Furthermore, the price action is favouring the bears and is suggesting that, if bulls fail to surpass the 20 day EMA barrier will lead to a further slippage toward $65. Conversely, if AEP stock escapes $75, bounce will carry forward toward $80 in the upcoming sessions. Per the Fib levels, 50% zone exists near $82 which must be escaped to flip the downtrend.
The RSI curve stayed near 51 showing a neutral chart structure forming a positive crossover indicating the buying interest in the last trading sessions.
The MACD indicator showed a bullish crossover and formed green bars on the histogram suggesting a positive outlook for the next sessions.
Summary
AEP stock price is inside the falling parallel channel under bearish dominance. However, bulls have retained the momentum and are trying to escape the 20 day EMA, which would lead to the extension of the rally toward $80. Additionally, massive additions of long positions were witnessed in the past sessions.
Technical Levels
Support Levels: $70 and $65
Resistance Levels: $80 and $85
Disclaimer
The views and opinions stated by the author or any other person named in this article are for informational purposes only and do not constitute financial, investment, or other advice. Investing in or trading crypto or stocks comes with a risk of financial loss.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
