Category Archives: EXC

On November 7, 2012, we did a research request on Exelon (found here).  At the time we said the following:

“The run that EXC has had in comparison to the average “high quality” index of utilities seems inordinate.  Especially when we consider that we’re at a historic low point for interest rates.  Any sudden change of interest rates to the upside will decimate all utilities, especially those that have had an excessive run to the upside.  As the market has adjusted the view on the prospects for EXC, the possibility exists that a swing to the opposite extreme is in the making for Exelon.”

Shortly after writing that piece on Exelon (EXC), the stock declined an additional –10%.  However, Exelon had more life in it than we anticipated.  At the low of November 23, 2012, EXC increased a stunning +32.23% by April 29, 2013.  But then came a rise in interest rates.  From April 29th to the present, EXC declined –18% to the level it was at on November 7, 2012.

It should not go unnoticed that on Edson Gould’s Speed Resistance Lines, EXC went up to the extreme downside target of $30.55 and failed.   The  inability of EXC to stay above the $30.55 level suggests that there is still downside risk with the threat of rising interest rates.

We still have support levels of $23.53 and $16.50.  We wouldn’t be surprised to see the rising interest rate environment persist for the foreseeable future.  Naturally, this should have a exaggerated negative impact on utilities going forward.