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Utilities have been riding high all year as investors reach for yield, regardless of growth prospects. But they say “what goes up must come down” — and, according to the Profit Scanner powered by Recognia, that’s certainly true for NiSource Inc. (NYSE:NI).
Throughout August, NiSource, a major U.S. electric, natural gas and water utility, has given off a series of bearish technical signals. Its latest implies about 6%–8% further downside.
On Monday, NI completed a classic pattern called the Head and Shoulders Top. Having stalled out in a lengthy distribution period at the top of its uptrend, the stock then breaks below support — and that reversal confirms that the stock’s now embarking on a new downtrend.
In the chart below, you can see the characteristics of the pattern: a tall peak in the middle (the “head”) flanked by two lower highs (the “shoulders”).
From here, Profit Scanner is looking for NI shares to reach $22.40–$22.90 in the next couple of months. However, NiSource is also looking weak in the near term. Above, you can see the short-term bearish signal from the MACD oscillator…as well as the bearish Moving Average Crossover as the 21-day m.a. fell below the 50-day m.a. In other words, bears may not have to wait very long at all.
Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.