Investing In Water Stocks

As well as being a source of life, water can also be a source for portfolio diversification. Like gold and oil, water is a commodity—and is becoming more scare in today’s world. So, just like any other scarcity, a water shortage creates investment opportunities.


One method of investing in the water industry would be to trade water companies listed in the Dow Jones U.S Utilities Average Index.


To mention some, American Water Works (AWK) company is based in New Jersey with a market cap $28.9 billion. AWK is a wastewater utility company serving an average of 15 million people across 16 US states.


Xylem (XYL), with market cap $21bn, is the producer of a wide range of water-related products such as pumps, meters and biological treatment equipment.


Energy Recovery (ERII) manufactures energy recovery devices for fluid flow industries mainly for sea water reverse osmosis, and has a market cap of 1.34bn.



American Water Works (AWK) Monthly Chart – Figure 1:


The stock is still in an uptrend, retested the 50-month exponential moving average for the fourth time last month since March 2020 after reaching its all-time high of $181.65 in December 2021. The $142 resistance level would be an entry point for investors given the stock closes above it with profit targets at $163.55 – 15% followed by $181.65 – 27.9%. Analysts believe as long as prices remain above $129.95, bulls could remain in control.


American Water Works Monthly Chart


Figure 1: American Water Works Monthly Chart (AWK): Source:



Xylem (XYL) Monthly Chart – Figure 2:


The stock ended its 60% retracement level in June 2022 where it rebounded from $80 support zone and gained 43.7 in 5 months closing at $112 until it started a downward correction on December 2022. Investors would consider an entry point above the 20 month exponential moving average targeting $113.30- 10% followed by $131- 27%, if the stock sustains trading above $97.30.


Xylem monthly chart

 Figure 2: Xylem monthly chart (XYL): Source:



Energy Recovery (ERII) Monthly Chart – Figure 3:


The stock is on a trading range, and found support at the 20-month exponential moving average since May 2022 targeting its all time high at $26.34 – 10%, followed by 35.50 – 48.5%. Support levels are $17.90 followed by $15.


Energy Recovery stock price chart

 Figure 3: Energy Recovery (ERII): Source:




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