Holding $42, The Southern Company (NYSE: SO) can still hit a new high

Posted On 26 Jul 2013

Tag: NYSE:SO, The Southern Company (NYSE: SO)

Denver, CO, 07/26/2013 (Avauncer.com) – The Southern Company (NYSE: SO) (Closed: $45.14, Up: 0.22%) had a strange day on Thursday as the price made no significant move but the volume at over 12 million was about 3 times higher than the average of 4 million. Normally, with that kind of volume a trending move in either direction is expected which was not the case here. Today’s session might show the way the price wants to go next.

The stock is in a big bull market since the 2001 bottom of $21. It corrected about two third in the bear market of 2008, but soon resumed its rally from the 2009 bottom of $26.48. This latest bull run is contained in a huge rising channel and the latest low of June 2013 has been made exactly on the lower boundary of this channel. That makes the June low of $42.32 very significant for keeping the major uptrend intact. The stock made a high at $48.59 in July 2012 and after a perfect 3 wave Zigzag correction, made another high at $48.74 in April 2013. This Double Top will be activated only when the zone of $41.75 - $42.32 is broken. The price action from the 2012 top has fulfilled all the minimum requirements of a Flat correction. If that truly is the case, then the implication would be very bullish as it shows tremendous strength in the long term. A new high would be expected soon in that case.

The last fall from $48.74 also subdivides into 5 waves. That could either be the C leg of the Flat mentioned above or the first wave of a fresh down leg. The indicators, though mainly neutral, show a slight bullish bias till now. We remain bullish as long as $42.32 remains intact. Bullish momentum will increase above $45.75 and if $44.49 is not touched before a new high above $45.75.

About the Author

Eric Shireya is a former newspaper section editor and reporter who has been reporting on Fashion and Lifestyle for about 10 years. His work has been published in national business trade magazines, and can be found on wire services, in daily newspapers, in university alumni magazines, on the web, in newsletters, and more. His career highlights have included interviewing Bob Hope, laughing through a phone conversation with Richard Simmons, chatting with Melissa Etheridge, and enduring a press conference in a hot air balloon.