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After struggling in late 2017 and early 2018, Southern Co (NYSE:SO) was able to stabilize and recover by pushing back above resistance at $45 as Treasury yields dropped back down to lower levels. However, with Treasury yields rising once again — the 10-year Treasury yield (TNX) is climbing back up toward 3% — utilities companies like SO, which rely heavily on their attractive dividend yields to attract buyers, are starting to fall once more.
The strong earnings season that Wall Street has enjoyed has also kept traders more willing to move their money from more conservative positions — like Southern Co. — to more aggressive positions in sectors that look like they may be growing more rapidly. We are looking for SO to drop back down to recent support at $43.
‘Buy to open’ the SO June 43 Put (SO180615P00043000) for a maximum price of $0.80.
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