FirstEnergy Corp. (NYSE: FE)

FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States. The company operates through Regulated Distribution and Regulated Transmission segments. It owns and operates coal-fired, nuclear, hydroelectric, natural gas, wind, and solar power generating facilities. The company also provides energy-related products and services to retail and wholesale customers.

Take a look at the 1-year chart of First (NYSE: FE) below with my added notations:

Over the past several weeks, FE has formed a $44 resistance (red), while also climbing a trend line of support (green). Together, these two lines have formed an ascending triangle on FE. Eventually, the stock will have to break either the $44 resistance or the triangle support.

The Tale of the Tape: FE is winding up between two key levels. A long trade could be made at the trendline support or on a break above $44. A break below the trendline would be an opportunity to enter a short trade.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!
Christian Tharp, CMT