Mid-Cap Utilities Ready to Power Up

This is a bullish transitional pattern that should eventually yield a major breakout and rally to new all-time highs. That would be quite an achievement in a sector that has been underperforming the broad market since the March 2009 low. For now, interested buyers can build early positions or wait until price trades up and over $50.89.

Calpine (CPN) -- Weekly eSignal

Calpine(CPN) tells an interesting tale on its weekly chart. The Texas-based natural gas and geothermal energy company got slammed in the bear market, dropping from $23 to $5 in nine months, and then bouncing up to the 50% selloff retracement in June of last year. The stock then went dead as a doornail, dropping into a triangle pattern that's still in place.

Price has been ticking higher in the last two weeks, after multiple upgrades, and looks ready to finally break out and resume its uptrend. The logical target for the next rally lies at $23, because that level would mount the "other half" of the selloff retracement. An early-entry strategy should work well with this narrow pattern, because a stop loss can be placed under the five-week low near $10.50.

Natural Fuel Gas (NFG) -- Daily eSignal

National Fuel Gas(NFG) is a natural gas energy provider operating in New York and Pennsylvania. It has held up remarkably well, considering the recent plunge in natural gas futures. The stock doubled in price after bottoming out $26 in March 2009 and rolled over in December, dropping into the mid-$40s.

It bounced off that level last month and has now rallied back to the three-month high. Accumulation is lagging price action, suggesting further consolidation, prior to a notable breakout. That might take another two to three weeks. Once the move is under way, the renewed uptrend could carry all the way to the 2008 high at $63.

Alan Farley provides daily stock picks and commentary with his "Daily Swing Trade" newsletter.

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