Key Takeaways
- Shares in electric utility Vistra, the biggest gainer in the S&P 500 this year, hit another record high in early trading Thursday before losing ground.
- Analysts say that the utility’s nuclear assets place it in a position to capitalize on the significant energy requirements needed to power AI infrastructure, such as data centers.
- Investors should monitor key lower price levels on Vistra’s chart around $107, $95, and $76.
- The measuring principle, which calculates the distance between the symmetrical triangle’s two trendlines near the start of the pattern and adds that amount to the breakout point, projects an upside target in the stock of $135.
Shares in electric utility Vistra (VST), the biggest gainer in the S&P 500 this year, hit another record high in early trading Thursday before losing ground to close lower.
Wall Street analysts say that the utility’s nuclear assets place it in a position to capitalize on the significant energy requirements needed to power artificial intelligence (AI) infrastructure, such as data centers. In reports this week, Jefferies bumped its 12-month target on the stock to $137 from $99, while Morgan Stanley upwardly revised its target on the shares to $132 from $110,
The AI utilities poster-child’s stock price has surged three-fold since the start of the year, recently toppling AI favorite Nvidia (NVDA) for the coveted position of the S&P 500’s top performing stock.
Vistra hit a new high of $122.01 early Thursday, before retreating to finish 4.1% lower at $114.16. The stock had risen nearly 6% on Wednesday.
Below, we take a closer look at Vistra’s chart and use technical analysis to point out important price levels to watch out for.
Symmetrical Triangle Breakout
After completing a 12-month trending move higher in May, Vistra shares traded within a symmetrical triangle for several months before staging a breakout above the pattern earlier this month.
In recent weeks, the stock has continued to make an impulsive move higher on above-average volume, indicating strong buying conviction.
The relative strength index (RSI) confirms bullish price momentum with a reading above the 80 threshold, but also warns of extremely overbought conditions that could give rise to near-term profit taking.
Looking ahead, investors should monitor several key levels on Vistra’s chart likely to attract attention.
Lower Price Levels to Watch
During retracements, the shares could initially retest the $107 level, where they may find support around the prominent late-May peak, which also marks the start of the symmetrical triangle.
Further selling could see the shares fall to the $95 region, a location on the chart where investors may seek entry points near a trendline connecting comparable trading levels from May to July with the Sept. 19 pre-gap high.
A deeper retracement in the shares could bring the $76 level into play. This area, sitting just below the symmetrical triangle’s lower trendline, would likely encounter buying interest near the April swing high and this month’s swing low.
Measuring Principle Upside Target
To project a price target for the stock’s current trending move, investors can use the measuring principle. To do this, we calculate the distance between the symmetrical triangle’s two trendlines near the start of the pattern and add that amount to the breakout point. For example, we add $50 to $85, which forecasts an upside target of $135.
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As of the date this article was written, the author does not own any of the above securities.