AYE is the utility holding company for Monongahela Power Co., The Potomac Edison Co., West Penn Power Co., Allegheny Generating Co. and others. For the FY ended 12/31/00, revenues rose 43% to $4.01B. Net income before extra. item rose 10% to $313.7M. Results reflect the acquisition of the assets of West Virginia Power and increased number of customers, partially offset by higher interest expenses due to increased LT debt outstanding.

April 29, 2001

Allegheny Energy, Inc. is a diversified utility holding company that provides electric generation and distribution services in Maryland, Ohio, Pennsylvania, Virginia and West Virginia. The stock has performed well over the past year after hitting a 4-year low of $23.62 on 3/10/00. On Friday, shares of AYE hit an all-time high of $51.30, representing a 117% gain from the low. The stock has posted gains in the last four sessions following its earnings announcement on Monday evening. On Thursday night, the company sold 12.4 million common shares in a stock offering at $48.25 per share, raising $598.3 million in gross proceeds. We believe that AYE could continue to trend higher now that it has cleared the earning announcement and the stock offering. We are also looking for a stock split out of the Annual Meeting on May 10th. The company already has enough shares for a split with 260 million shares outstanding and 123 million shares issued. Going forward, AYE has support at Thursday’s intra-day high of $49.20 with stronger support at $48.17, the 10-dma. Resistance is currently at Friday’s intra-day high of $51.30 and then possibly $53. Traders may consider opening new positions on a bounce off of $49.20 or a breakout above $51.30 on volume greater than 300,000 shares by noon. We plan to place stops at $47 as downside protection.

Picked on April 29th @ $50.60
Change since picked +0.00
Stop Loss @ $47.00

May 10, 2001

Allegheny Energy opened Thursday’s session at an all-time high of $52.40. However, the stock pulled back from this high as the day wore on. Shares of AYE traded to an intra-day low of $51.60 before bouncing back to a close of $52.15 on volume of 391,000 shares. The company held its Annual Meeting on Thursday, but we did not get a split announcement. On the positive side, AYE has put in six straight higher lows and it continues to trend higher as the California energy crisis remains in the news. For now, AYE has support at Thursday’s intra-day low of $51.60 with additional support at $51.20, the 10-dma. Resistance has shown up at Thursday’s intra-day high of $52.40 and then possibly $53 or $54. A bounce off of $51.60 or a move above $52.40 on midday volume greater than 300,000 shares may be possible entry points. We are keeping our stops at $47 as downside protection.

Picked on April 29th @ $50.60
Change since picked +1.55
Stop Loss @ $47.00

May 8, 2001

Allegheny Energy, Inc. sold off slightly on Tuesday after closing at an all-time high of $52 in the previous session. Shares of AYE traded in a tight range, hitting an intra-day high of $51.80 and an intra-day low of $51.15, before closing at $51.58 on volume of 413,000 shares. Volume has stabilized following the secondary offering on April 27th so AYE may be able to rally as we move closer to the Annual Meeting on Thursday. We are looking for a split announcement out of the meeting. Until then, support is the 5-dma at $50.97 with stronger support at $50.50, the 10-dma. Resistance has moved up to Monday’s intra-day high of $52 and then possibly $53 or $54. Look for a bounce off of $50.97 or a move above $52 on midday volume of at least 300,000 shares before opening new positions. Our stops remain at $47.

Picked on April 29th @ $50.60
Change since picked +0.98
Stop Loss @ $47.00

May 6, 2001

Allegheny Energy, Inc. regained some of its momentum on Friday, following a round of profit taking in the energy sector. Shares of AYE closed the session at an intra-day high of $51.00 on volume of 411,000 shares. The stock has been able to hold its 10-dma over the last three sessions on declining volume, so AYE may have found a short-term bottom just below the $50 mark. The company has scheduled its Annual Meeting for May 10th and we are looking for a split announcement out of the meeting. The company currently has enough shares for a 3:2 split, with 260 million shares outstanding and 123 million shares issued. From a technical standpoint, support has moved up to Thursday’s intra-day high of $50.25 with stronger support at $49.68, the 10-dma. Resistance is now at Wednesday’s intra-day high of $51.20 and then the all-time high of $51.75. A bounce off $50.25 or a move above $51.20 on midday volume of at least 300,000 shares may be possible entry points. We are leaving our stops at $47 as downside protection.

Picked on April 29th @ $50.60
Change since picked +0.40
Stop Loss @ $47.00