Find "Utility" in this Defensive Play – Technical Analysis
Highlighting: Edison International (Public, NYSE:EIX)
Sectors across the board saw heavy losses on Friday, except for Utilities. This defensive play is known to be a safe haven in volatile markets due to the the products of the constituents always being in demand. As a result, stocks within this space find seasonal strength during the summer months as investors seek to protect gains through this erratic period. Edison International is producing the technical indicators consistent with an entry point. I present to you your defensive play.
Stocks were slaughtered on Friday as investors stripped away value from wherever it was found. Of the 1661 stocks analyzed, 230 advanced, 1423 declined, and the last 8 were neutral on the day. Losses averaged 2.34% on volumes consistent with the day prior. Losses centered around small-caps with an average decline amongst the stocks at 3.68%. Mid-Caps and Large-Caps came out rather equivalent at losses of 1.98% and 1.94%, respectively. Emphasis has shifted from overbought levels to oversold levels as stochastics flip on the dramatic market shift. Currently just over 30% of stocks are listed as oversold according to this technical indicator, while 8% are listed as overbought. This is the inverse from what was witnessed just one week ago.
Analysis has revealed that with a buy date of April 8 and a sell date of November 28, investors have benefited from a total return of 312.96% over the last 10 years.This scenario has shown positive results in 8 of those periods.
Conversely, the best return over the maximum number of positive periods reveals a buy date of April 8 and a sell date of June 16, producing a total return over the same 10-year range of 210.15% with positive results in 10 of those periods.
The buy and hold return for the past 10 years was 68.34%.
Comments:
Edison Intl has an outperform rating amongst analysts and has recently been accumulated, on net, by institutions seeking exposure to this sector.Fundamentals for this company look to be average, and current levels put the market value of the stock fairly close to the book value of $33.Fundamental targets indicate a value closer to $37.20, or 8% above Friday’s close price.Seasonality for the stock is strongly positive between now and the end of June for gains of over 6%.Earnings are set to be reported this Friday before the market opens and investors will be examining the company to determine if expected results of 78 cents per share will be met.
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Disclosure: Mr. Vialoux does not own securities mentioned in this report.
Disclaimer: Comments and opinions offered in this report at EquityClock.com are for information only. They should not be considered as advice to purchase or to sell mentioned securities.
Data offered in this report is believed to be accurate, but is not guaranteed.
Click Here to learn more about the proprietary, seasonal rotation investment strategy developed by research analysts Don Vialoux, Brooke Thackray, and Jon Vialoux.
