NextEra Energy, Inc. (NYSE: NEE)

NextEra Energy, Inc., through its subsidiaries, engages in the generation, transmission, distribution, and sale of electric energy in the United States and Canada. The company is involved in the generation of renewable energy from wind and solar projects. It also generates electricity through natural gas, nuclear, oil and coal, and hydro power plants. The company serves approximately 8.9 million people through approximately 4.6 million customer accounts in the east and lower west coasts of Florida. In addition, it leases wholesale fiber-optic network capacity and dark fiber to telephone, wireless, Internet, and other telecommunications companies. As of December 31, 2011, NextEra Energy, Inc. had approximately 41,000 mega watts of generating capacity. The company was formerly known as FPL Group, Inc. and changed its name to NextEra Energy, Inc. in May 2010. NextEra Energy, Inc. was founded in 1984 and is headquartered in Juno Beach, Florida.

To review potential trading opportunities with NextEra’s stock, please take a look at the 1-year chart of NEE (NextEra Energy, Inc.) below with my added notations:

1-year chart of NEE (NextEra Energy, Inc.)

NEE had a great rally from November through July. The stock has since formed the start of what could end up being a double top price pattern (blue). Double tops are reversal patterns that are as simple as they sound: Rallying up to a peak (T), selling off to a support, and then rallying back up again to approximately the same top (T). NEE would confirm this pattern by breaking down below the current $66 support (green). However, it is just as possible that NEE could hit a new 52-week high if the stock could break above the $72 resistance (red).

The Tale of the Tape: NEE may be forming a double top with a $66 support level and the stock already has a $72 52-week high resistance. Long trades could be entered on a pullback to the $66 support or on a breakout above $72. A short trade would be advised on a break below $66.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT