Is it time for a utilities play?

Defensives have been outperforming the S&P 500 since March. If you believe the outperformance will continue, then now might be the time to buy, as they are approaching the support line.

I'm particularly watching utilities. In addition to being a classic defensive sector, utilities also have "growth" potential. They had a period of strong outperformance a couple years ago during the renewables boom. Presently they look cheap compared to other sectors. The equal-weight utilities to equal-weight S&P 500 ratio has made a large bullish divergence and is currently testing a support level. Might it make a double bottom here?

I particularly like NRG Energy, a Texas utility with a diversified basket of power generation capabilities, including fossil fuels and renewables. NRG is looking like it will make a breakout attempt soon:

It has a forward P/E of 6, a forward P/S under .5, and a P/FCF under 11. Dividend yield is over 4%. Open interest is bullish, and upside to the average analyst price target is 36%. This bad boy could seriously rip if utilities return to strength.
Utilities move somewhat in sympathy with oil prices, and oil prices are breaking out. That could prove to be a catalyst for this sector.
I'm particularly watching utilities. In addition to being a classic defensive sector, utilities also have "growth" potential. They had a period of strong outperformance a couple years ago during the renewables boom. Presently they look cheap compared to other sectors. The equal-weight utilities to equal-weight S&P 500 ratio has made a large bullish divergence and is currently testing a support level. Might it make a double bottom here?
I particularly like NRG Energy, a Texas utility with a diversified basket of power generation capabilities, including fossil fuels and renewables. NRG is looking like it will make a breakout attempt soon:
It has a forward P/E of 6, a forward P/S under .5, and a P/FCF under 11. Dividend yield is over 4%. Open interest is bullish, and upside to the average analyst price target is 36%. This bad boy could seriously rip if utilities return to strength.
Utilities move somewhat in sympathy with oil prices, and oil prices are breaking out. That could prove to be a catalyst for this sector.
Nota
Goldman said in a note today that NRG is 50% undervalued. This caused the stock to spike in a big way. I still have a good number of shares, but I sold the last of my calls and locked in a chunky profit.Penerbitan berkaitan
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Penerbitan berkaitan
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.