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 17, 2001

Allegheny Energy traded to an all-time high of $54.10 on Tuesday. However, the stock fell into negative territory as the market pulled back from its intra-day highs. Shares of AYE finished the session at $53.40 on volume of 311,000 shares. Despite Thursday’s negative action, ASD remains in a 2-month upward trend and the stock may continue to hit new highs. However, the company held its annual meeting on Thursday and the stock may sell off if we do not get a split announcement in the near future. In the meantime, support has moved up to Thursday’s intra-day low of $53.24 with stronger support at $53.05, the May 11th intra-day high. Resistance is Thursday’s intra-day high of $54.10 and then $55. Traders may consider entry points on a bounce off of $53.24 or a breakout above $54.10 on volume of at least 250,000 shares by noon. We are bumping our stops up to $53 to protect additional gains.

Picked on April 29th @ $50.60
Change since picked +2.80
Stop Loss @ $53.00

May 15, 2001

Allegheny Energy is on a five-day winning streak. On Monday, AYE traded to an all-time high of $53.85. The stock was under pressure during most of Tuesday’s session, hitting an intra-day low of $52.65 just after the opening bell. However, AYE was able to rally back into positive territory to a close of $54.35, ending the day with a $0.10 gain on volume of 386,000 shares. The stock continues to trend higher as the energy sector regains its momentum. On a cautionary note, AYE put in its first lower low since May 2nd, so we may get a round of profit taking in the near future. Going forward, support is the 5-dma at $52.73 with additional support at $52.16, Friday’s intra-day high. Resistance has come in at Monday’s intra-day high of $53.85 and possibly the $55 mark. Look for a bounce off of $52.73 or a breakout above $53.85 on midday volume greater than 300,000 shares before starting new plays. Our stops remain at $52 to protect gains.

Picked on April 29th @ $50.60
Change since picked +2.75
Stop Loss @ $52.00

May 13, 2001

Allegheny Energy, Inc. has posted gains in each of the last three sessions. On Friday, shares of AYE closed at an all-time high of $53.05 on volume of 447,000 shares. The stock has broken out of its $50-$52 trading range after eight sessions of consolidation and now appears to be embarking on a new up trend. The stock could continue to ride its 5-dma, now at $52.12, to new highs. The company just held its annual meeting, so we will keep our fingers crossed for a split announcement soon. Until then, support has moved up to Thursday’s intra-day high of $52.40 with stronger support at $52.12, the 5-dma. All forms of resistance have been taken out so new resistance may show up at $54 or $55. Consider entry points on a bounce off of $52.40 or a breakout above $54 on volume of at least 300,000 shares by noon. We have moved our stops up to $52 to lock in a gain should AYE reverse course.

Picked on April 29th @ $50.60
Change since picked +2.45
Stop Loss @ $52.00