Long Trade Idea
Enter your long position between $289.00 (the intra-day low of its last bearish candlestick) and $297.23 (Friday’s intra-day high).
Market Index Analysis
Constellation Energy (CEG) is a member of the NASDAQ 100 Index and the S&P 500 Index.
Both indices retreated from record highs, and decreasing bullish trading volumes suggest more downside pressure ahead.
The Bull Bear Power Indicator of the S&P 500 Index is bearish with a descending trendline.
Market Sentiment Analysis
Equity futures point to a lower opening amid renewed tariff uncertainty. The US Supreme Court ruled against President Trump’s tariffs, placing the US government on the hook for a messy refund process for approximately $175 billion. President Trump lashed out immediately, imposed a 10% global tariff on all imports, and then raised it to 15%. Fourth-quarter GDP missed expectations badly, and the PCE inflation indicator remained sticky at 3.0%. On the earning front, NVIDIA, Domino’s Pizza, Home Depot, and Warner Bros. will report this week.
Constellation Energy Fundamental Analysis
Constellation Energy is the largest nuclear power generator and a leading energy company in the US. It is also at the forefront of powering data centers for AI companies and is a leading player in the green energy revolution.
So, why am I bullish on CEG ahead of its earnings release?
Expectations call for revenues of $4.82 billion and earnings per share of $2.26, which Constellation Energy may beat, but I expect an upbeat outlook amid surging AI data center demand. The completed $16.4 billion Calpine acquisition made CEG the largest US power producer, with 55 GW of capacity. It should also increase free cash flow by $2 billion and EPS by 20%. I am equally bullish about its long-term revenue visibility and nuclear capacity expansion.
MCEGic | Value | Verdict |
P/E Ratio | 33.77 | Bearish |
P/B Ratio | 8.31 | Bearish |
PEG Ratio | 13.02 | Bearish |
Current Ratio | 1.56 | Bearish |
ROIC-WACC Ratio | Negative | Bearish |
Constellation Energy Fundamental Analysis Snapshot
The price-to-earnings (P/E) ratio of 33.77 makes CEG an expensive stock. By comparison, the P/E ratio for the S&P 500 Index is 29.70.
The average analyst price target for CEG is $397.99, which suggests excellent upside potential with manageable downside risks.
Constellation Energy Technical Analysis
Today’s CEG Signal
The CEG D1 chart shows price action breaking out above its horizontal support zone.
It also shows price action between its descending 0.0% and 38.2% Fibonacci Retracement Fan level.
The Bull Bear Power Indicator is bullish with an ascending trendline.
The average bullish trading volumes are higher than the average bearish trading volumes.
CEG advanced more than the S&P 500 Index since February, a bullish confirmation.
My CEG Long Stock Trade
CEG Entry Level: Between $289.00 and $297.23
CEG Take Profit: Between $364.56 and $373.23
CEG Stop Loss: Between $252.38 and $260.69
Risk/Reward Ratio: 2.06
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