Will AES CORP breakout?

AES CORP (NYSE:AES) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NYSE:AES.

What is the technical picture of NYSE:AES telling us.

Every day ChartMill assigns a Technical Rating to every stock. The score ranges from 0 to 10 and is determined by evaluating multiple technical indicators and properties.

Taking everything into account, AES scores 9 out of 10 in our technical rating. This is due to a consistent performance in both the short and longer term time frames. Also compared to the overall market, AES is showing a nice and steady performance.

• Both the short term and long term trends are positive. This is a very positive sign.
• Looking at the yearly performance, AES did better than 92% of all other stocks.
• AES is part of the Independent Power and Renewable Electricity Producers industry. There are 41 other stocks in this industry. AES outperforms 90% of them.
• AES is currently trading near its 52 week high. This is a good sign, certainly because the S&P500 Index is not trading near new highs.
• In the last month AES has a been trading in the 25.50 - 28.57 range, which is quite wide. It is currently trading near the high of this range.

Looking at the Setup

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NYSE:AES this score is currently 9:

Besides having an excellent technical rating, AES also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 28.49. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 28.16, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for AES in the last couple of days, which is a good sign. Very recently a Pocket Pivot signal was observed. This is another positive sign.

How can NYSE:AES be traded?

One way to play this would be to wait for the actual breakout to happen and buy when the stock breaks out above the current consolidation zone. A possible place for a stop loss would be below this zone.

Of course, there are many ways to trade or not trade NYSE:AES and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

More breakout setups can be found in our Breakout analyzer.