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 24, 2001

Allegheny Energy, Inc. has traded to new highs in eight of the last 11 sessions. On Tuesday, shares of AYE hit an all-time high of $55.09 before pulling back to a close of $54.70 on volume of 351,000 shares. The stock is maintaining a steady upward trend with regular tests of the 10-dma. On the negative side, daily volume has been light and the MACD may be a bit stretched. Going forward, support is holding at the 5-dma, now up to $54.46, with additional support at $53.93, the 10-dma. Resistance is Thursday’s intra-day high of $55.09 and then $56. A bounce off of $54.46 or a breakout above $55.09 on midday volume greater than 225,000 shares may be possible entry points. We are leaving our stops at $53 as protection.

Picked on April 29th @ $50.60
Change since picked +4.10
Stop Loss @ $53.00

May 22, 2001

Allegheny Energy, Inc. traded to an all-time high of $54.62 just before Monday’s closing bell. Unfortunately, the stock spent all of Tuesday in negative territory. Shares of AYE hit an intra-day low of $54.15 before closing at $54.40 on volume of 307,000 shares. The stock continues to trend higher with frequent tests of the lower end of the channel. However, daily volume has been on the light side so AYE may run into some selling pressure in the near future. From a technical standpoint, support has moved up to the 5-dma at $54.02 with stronger support at $53.38, the 10-dma. Resistance is now at the all-time high of $54.62 and then possibly $55 or $56. Look for entry points on a bounce off of $54.02 or a breakout above $54.62 on volume of at least 225,000 shares by noon. We are leaving our stops at $53 to protect gains.

Picked on April 29th @ $50.60
Change since picked +3.80
Stop Loss @ $53.00

May 20, 2001

Allegheny Energy, Inc. is regaining its momentum after testing support at the 5-dma. On Friday, shares of AYE traded to an intra-day high of $53.95 before pulling back to a close of $53.80 on volume of 279,000 shares. The stock has been consolidating in the $53-$54 range over the last week and volume has been trending lower. AYE may need a positive volume surge to drive the stock out of its trading range. Going forward, support remains at Thursday’s intra-day low of $53.24 with stronger support at $53.05, the May 11th intra-day high. Resistance is the all-time high of $54.10 and then $55. A bounce off of $53.24 or a breakout above $54.10 on midday volume greater than 225,000 shares may be possible entry points. Our stops are holding steady at $53.

Picked on April 29th @ $50.60
Change since picked +3.20
Stop Loss @ $53.00