NextEra is the largest American utility by market cap. It is also the world’s largest generator of energy from wind and solar sources. It generates 22 GW from these sources. NextEra benefits from long-term franchise agreements with various states, giving it a monopoly to supply energy in those regions. The power and utility sector is also undergoing a fundamental shift away from carbon-intensive energy to renewable energy. NextEra’s positioning as a leader in the renewables space places is favourably to leverage this trend. Its long-term growth prospects look bright.

The long-term monthly chart for NextEra shows a steady uptrend since 2011. In recent years, prices have respected the bottom of the long-term trend for the most part. The $70 level is an important area as it had previously acted as a resistance zone and later as support. The price currently is at the intersection of two important points. First is the $70 support zone, and the second is the bottom of the long-term trend. We are pre-empting the reversal of the price from this intersection zone with a target price of $85, close to the top of the long-term trend. A stop-loss can be placed at $69 below the bottom trend line and the support level.
Position entered into our long-term tracking portfolio today. The entry point is at $73.22, and a stop-loss placed at $67.52, which is 8 % below the entry point. The short-term to medium-term take profit at the top of the trend is set at $79.25, giving a profit of 8%.