Following two days of strong price gains and a heat wave on the East Coast, Consolidated Edison (ED) is poised to break out of a bullish continuation pattern. This could be a great entry opportunity to ride this utility higher.

After hitting a high of $46.45 in January, Con Edison began forming a bullish flag pattern -- a pattern that is characterized by parallel down-trending support and resistance levels. After bouncing the last time off of its down-trending support level at $41.52 in early June, Con Edison has been making a bullish move higher.

MAJOR PAPERS:

• According to the Wall Street Journal's (subscription required) "Heard on the Street" column, content firms such as Akamai Technologies (NASDAQ: AKAM) and Limelight Networks (NASDAQ: LLNW) are getting hammered, and there appears to be no letup in sight because while online traffic is up 60% a year over the last few years, those firm's shares are expensive and, says S&P's Scott Kessler, "There's plenty more room for [Akamai and Limelight] to fall."
• TiVo (NASDAQ: TIVO) is looking at a new revenue source -- being paid to give out market research to advertisers, reported the Wall Street Journal. The company plans to announce today that it will add demographic data, including age, income, marital status and ethnicity, about its viewers.
• The Financial Times (subscription required) reported that Ford (NYSE: F) is likely to have to pay any buyer of its Jaguar and Land Rover units because of a $2B pension deficit, according to people close to the situation.

OTHER PAPERS:

• The New York Times reported that Con Edison (NYSE: ED) was fined $18M for service disruptions in 2006, including the nine-day blackout in western Queens, NY.
• The Associated Press reported that Baidu (NASDAQ: BIDU) is considering listing on the Hong Kong and mainland China stock markets, according to the company's CEO.

Consolidated Edison (NYSE: ED) reported good first quarter earnings of $256 million, $0.99 EPS, up 41% from 1Q 2006 earnings of $181 million, or $0.74 per share. A big enough increase to make even a jaded in-bound strap hanger smile. Con Edison posted these numbers despite a $10 million loss, $0.04 per share, in complicated net mark-to-market valuations. This amount is only one-third as big as net mark to market losses of $31 million in 1Q 2006. Con Edison management states the earnings increase is a result of sales growth, a stretch of colder than normal temperatures during the early part of 1Q as well as a utility rate hike for NYC.

Con Edison transmits electricity, gas and even steam, and all three sectors recorded volume increases during 1Q 2007, electricity up 2.6%, gas up 7.4% and steam up 0.5%. Con Edison will continue its expansion and updating schema in both NYC and several surrounding boroughs during FY 2007 and beyond, and recently began the process of issuing an additional 11 million shares at an average price of $50.60 to fund these ambitious programs. The stock recently closed at $50.95, and its P/E ratio of 15.9 is less than the industry average of 17.10. Con Edison has annual revenues in excess of $12 billion, with assets valued at over $27 billion. It is one of the largest investor-owned energy companies in the US.