Short Trade Idea
Enter your short position between $73.59 (the intra-day high of its last bearish candlestick) and $74.43 (yesterday’s intra-day high).
Market Index Analysis
- Xcel Energy (XEL) is a member of the NASDAQ 100 and the S&P 500.
- Both indices trade inside bearish chart patterns with rising bearish volumes.
- The Bull Bear Power Indicator of the S&P 500 Index is bullish with a negative divergence.
Market Sentiment Analysis
Equity markets extended their year-end slide with rising bearish trading volumes, and equity futures are pointing to another sell-off this morning. Minutes from the last FOMC meeting revealed a tight decision to cut interest rates, while the Dot Plot Chart shows just one interest rate cut in 2026 and one in 2027. Tesla issued a downbeat outlook, while warnings about the circular financing trap in AI, led by NVIDIA, added to bearish sentiment. Today’s session is likely to extend this week’s downtrend amid a lack of catalysts in either direction.
Xcel Energy Fundamental Analysis
Xcel Energy is a US-regulated electric utility and natural gas company with four subsidiaries serving Colorado, Minnesota, Wisconsin, Michigan, North Dakota, South Dakota, Texas, and New Mexico. It is also a major player in the green energy transition.
So, why am I bearish on XEL amid its current slide?
I remain bearish after the Texas Attorney General filed a lawsuit over the Smokehouse Creek Wildfire, claiming XEL was responsible. Despite its recent slide, valuations remain high, while its return on assets, equity, and invested capital rank among the worst in its sector. Its bond tender resulted in the acceptance of 506 million in bonds, but debt levels remain excessive.
Metric | Value | Verdict |
P/E Ratio | 22.62 | Bearish |
P/B Ratio | 2.07 | Bullish |
PEG Ratio | 2.75 | Bearish |
Current Ratio | 0.79 | Bearish |
ROIC-WACC Ratio | Negative | Bearish |
The price-to-earning (P/E) ratio of 22.62 indicates that XEL is expensive relative to its industry. By comparison, the P/E ratio for the S&P 500 is 29.46.
The average analyst price target for XEL is $87.53, suggesting modest upside potential but high downside risk.
Xcel Energy Technical Analysis
Today’s XEL Signal
- The XEL D1 chart shows price action inside a bearish price channel.
- It also shows price action between its descending 0.0% and 38.2% Fibonacci Retracement Fan levels.
- The Bull Bear Power Indicator turned bearish with a descending trendline.
- The average bearish trading volumes are higher than the average bullish trading volumes.
- XEL corrected as the S&P 500 Index recently advanced, a bearish confirmation.
My XEL Short Stock Trading Signal
- XEL Entry Level: Between $73.59 and $74.43
- XEL Take Profit: Between $62.58 and $65.21
- XEL Stop Loss: Between $78.13 and $79.33
- Risk/Reward Ratio: 2.43