American Electric Power Stock Is Reversing To The Upside

by at FXTM.
Tran Dai Phat
Tran Dai Phat

The American Electric Power Stock (NASDAQ: AEP) on the Daily Chart has been following a downward path since 20 April 2021, having found resistance at the $90,63.

The formation of the Japanese candlestick reversal pattern known as Dark Cloud Cover signalled the very beginning of the downward bias.

The attractive price enticed bears who entered the market with short positions and as a result they have pushed AEP to lower levels, following a pattern of successively lower tops and lower bottoms.

Subsequently, the stock formed a Long White Body near the support level of $81.94 which hinted at the end of the decline and the potential beginning of a rally.

Technical Indicators

Upon applying Technical analysis on the price chart, one can see that the Long White Body managed to close above the 10-period Exponential Moving Average line, a fact that also points to the upward direction and the bullish bias in the market.

Additionally, the Relative Strength Index Oscillator registers values above the fifty line, which also confirms the positive sentiment in the market.

Both technical indicators, as well as the Japanese candlestick reversal pattern, are in agreement in terms of AEP’s upward bias.

Furthermore, the current price is trading above the downward trend line, which also implies that demand is greater than supply.

Retracement Levels

Applying the Fibonacci Retracement tool to the high price of the Bullish Japanese candlestick at the price of $84.83 and dragging it down to the bottom at the price of $82.12, three price targets may be calculated:

  • The first price target is estimated at $87.54 (200%).
  • The second price target is seen at $90.25 (300%).
  • The third price target is projected at $92.96 (400%).

Of course, it remains to be seen whether the crowd psychology as well as the bulls’ pressure will manage to maintain the control of the market and push AEP higher.

AEP Daily july 2nd

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