Constellation Energy Corp (NASDAQ:CEG) shares are tumbling on Friday. The Trump administration is preparing to call for an emergency auction aimed at accelerating new power plant construction within the PJM grid.
Constellation Energy shares are retreating from recent levels. Why are CEG shares down?
The New Government Initiative
According to Bloomberg, the administration is expected to urge PJM Interconnection, which is the regional grid operator in which Constellation participates, to launch an auction that would allow major tech companies and hyperscalers to bid on 15‑year contracts to build new power plants.
The directive is expected to be signed Friday at the White House by the National Energy Dominance Council, with governors from Pennsylvania, Ohio and Virginia in attendance. If implemented, the plan could pave the way for as much as $15 billion in new power plant development across the PJM region.
The proposal follows President Donald Trump's push for large technology companies to shoulder more of the rising electricity costs tied to the rapid expansion of AI‑driven data centers. Earlier this week, Microsoft Corp (NASDAQ:MSFT) said it would adopt a "community‑first" approach by working with local utilities to ensure residents are not hit with higher power bills.
Rick Pederson, vice chairman and chief strategy officer at Bow River Capital, told Benzinga that data‑center investment could increasingly migrate to states such as Texas, Oklahoma or North Dakota, where power costs are lower, interconnections are faster and there is "less transactional friction."
Is Constellation Energy’s Downtrend Reversible?
Constellation Energy is currently positioned below key moving averages, indicating bearish pressure in the market. With the stock trading approximately 12% below its 20-day, 50-day and 100-day simple moving averages, traders should be cautious as this suggests a lack of upward momentum.
The RSI is currently at 45.83, which is considered neutral territory. This level indicates that the stock isn’t in an overbought or oversold condition, suggesting that traders should watch for potential shifts in momentum before making decisions.
Currently, MACD is below its signal line, indicating bearish pressure on Constellation Energy. The stock may continue to face downward momentum unless there’s a significant change in price action.
Key support is at $302.00, while resistance is at $328.00. If the stock approaches the support level, traders should be alert for a potential bounce or a breakdown, while a move toward resistance could signal a short-term recovery.
In June, the golden cross occurred when the 50-day SMA crossed above the 200-day SMA, which typically indicates a bullish trend. However, the stock’s current positioning below its shorter-term moving averages suggests that this bullish signal may not be strong enough to reverse the recent downward trend.
Over the past 12 months, Constellation Energy has seen a slight decline of 2.38%. This performance reflects the challenges the stock has faced, particularly in the context of its recent price action and the broader market environment.
Currently, the stock is trading at 58.2% of its 52-week range, indicating it is positioned closer to its recent lows than its highs. This positioning suggests potential weakness and may lead traders to be cautious about entering new positions until a clearer trend emerges.
CEG Price Action: Constellation Energy shares were down 11.7% at $301.24 at the time of publication on Friday, according to Benzinga Pro.
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