Strengths:
- Fundamentals: AWR is outperforming its industry = leader, PE is 25 vs. 19 for industry; total debt/equity is 0.7 vs 1 for the industry; good 5 yr earnings growth, gross margins, and ROE, even though they are slightly less than industry avg, 14%, 45%, and 13% respectively; Institutional ownership is very strong at 66% vs an industry avg of 1%. (source: reuters.com)
- Technical: (1) New 52 wk high as last major swing high (2) Orderly bullish flag off of this swing high with, (3) strong selling volume at the bottom of the flag, indicating seller's exhaustion (4) breakout from the flag with a final push lower on very strong selling volume that was absorbed well = lots of effort no result (5) this final push lower was unable to break the swing low, followed by a strong push up to make a new 52 wk high, completing the cup that only retraced about 30% of the prior upswing (6) small retracement off the high that is very orderly with many overlapping bars and tight closes on (7) decreasing volume, this is the handle of the cup n handle pattern, the handle only has retraced about 10% of the prior upswing.
Weakness':
- Fundamental: I would prefer stronger short interest in this stock to help accelerate any up movement, currently at about 730K shares vs. shares outstanding of 36.7 million; and a short ratio of about 4 days (source: thestreet.com). Almost certain increase in the Fed Funds Rate in December, this could drag the overall economy down. However, this could work out for this stock, given that it is a utility that pays dividends, these stocks do tend to do better during contraction stages.
- Technical: I'm short the S&P 500 (SPY) due to the weakening technical picture of the broad market, appears to be topping and has been trapped in a rather broad sideways channel with large, erratic swings, and recent "death cross" of the 50 SMA below the 200 SMA.
Entry 1 - 42.80 (about 1% premium to swing high), breakout of cup n handle
Target 1 - 51.70 (measured move, AB=CD)
Stop 1 - 39.67 (swing low of handle (6))
Entry 2 - 40.20 (about 1% premium to flag breakout, same area that the handle has found support)
Target 2 - same as Target 1, but with improved R:R ratio due to reduced entry price
Stop 2 - 35.80 (swing low at (5))
- Fundamentals: AWR is outperforming its industry = leader, PE is 25 vs. 19 for industry; total debt/equity is 0.7 vs 1 for the industry; good 5 yr earnings growth, gross margins, and ROE, even though they are slightly less than industry avg, 14%, 45%, and 13% respectively; Institutional ownership is very strong at 66% vs an industry avg of 1%. (source: reuters.com)
- Technical: (1) New 52 wk high as last major swing high (2) Orderly bullish flag off of this swing high with, (3) strong selling volume at the bottom of the flag, indicating seller's exhaustion (4) breakout from the flag with a final push lower on very strong selling volume that was absorbed well = lots of effort no result (5) this final push lower was unable to break the swing low, followed by a strong push up to make a new 52 wk high, completing the cup that only retraced about 30% of the prior upswing (6) small retracement off the high that is very orderly with many overlapping bars and tight closes on (7) decreasing volume, this is the handle of the cup n handle pattern, the handle only has retraced about 10% of the prior upswing.
Weakness':
- Fundamental: I would prefer stronger short interest in this stock to help accelerate any up movement, currently at about 730K shares vs. shares outstanding of 36.7 million; and a short ratio of about 4 days (source: thestreet.com). Almost certain increase in the Fed Funds Rate in December, this could drag the overall economy down. However, this could work out for this stock, given that it is a utility that pays dividends, these stocks do tend to do better during contraction stages.
- Technical: I'm short the S&P 500 (SPY) due to the weakening technical picture of the broad market, appears to be topping and has been trapped in a rather broad sideways channel with large, erratic swings, and recent "death cross" of the 50 SMA below the 200 SMA.
Entry 1 - 42.80 (about 1% premium to swing high), breakout of cup n handle
Target 1 - 51.70 (measured move, AB=CD)
Stop 1 - 39.67 (swing low of handle (6))
Entry 2 - 40.20 (about 1% premium to flag breakout, same area that the handle has found support)
Target 2 - same as Target 1, but with improved R:R ratio due to reduced entry price
Stop 2 - 35.80 (swing low at (5))
