Following yesterday’s Daily Market Outlook, in which I suggested investors buy utilities, a number of readers asked me to name my favorite utility stock, and that is Dominion Resources.
On the opening Wednesday, the stock led the entire S&P 500, rising almost 6% on huge volume. It broke from a bullish triangle, with support at its 50-day moving average at $58, and gapped to an intraday high of $61.94. It closed up 2% on the day.
The reason for the jump was the approval from the U.S. Department of Energy (DOE) for natural gas exports to non-Free Trade Agreement countries. This approval allows Dominion to export 770 million cubic feet of natural gas a day for 20 years. No one has yet calculated the benefit in terms of earnings, but needless to say, this is a very big deal.
The stock should be bought for a combination of growth and income.