Duke Energy is a stock I have commented on several occasions as it is one which has a tendency to consolidate for extended periods and as such can provide excellent returns when used for trading covered calls, particularly when the chart also exhibits a mildly bullish tone. In my last post I highlighted the strong ceiling of resistance building at the $91 per share level, coupled with the floor of support at $86 per share and denoted with the blue dashed line of the accumulation and distribution indicator. Both were equally strong, the width of the line indicating how many times each had been tested and held with the volume point of control sandwiched between.
In the last three weeks we have seen the stock break through the ceiling of resistance and move higher, however, not perhaps with the conviction one might wish. Note the falling volume and in last week’s price action the stock rallied to $95.70 before closing at $93.90 on a deep wicked candle with high volume so we can expect some short term weakness.
Long term with the deep platform of support now in place and with the price action approaching a low volume node on the VPOC indicator, this is one stock I expect to continue higher and confirmed by the trend monitor indicator which has now reverted to bright blue on the weekly chart. Analysts will be looking towards the next earnings release on the 1st November with a forecast of $1.73 against $1.65 for the equivalent quarter in 2018, and which if achieved should help to drive further momentum into the stock.
By Anna Coulling
Charts by NinjaTrader and indicators from Quantum Trading
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