Engie SA (EPA: ENGI) is a major French multinational electric utility company. Among investors, the company is seen a stable dividend-paying utility company, which could be considered for a longer-term holding period. Recently, Engie SA reported its H1 earnings, which have declined around 9,3%, due to the pandemic. However, it is not the only energy company out there, which had taken a hit from the coronavirus and all the global problems that came with it. The company is still optimistic and anticipates to have a net recurring income for the Group between 1.7 and 1.9 billion by the end of 2020. Let’s not forget, that one of the sectors, which tends to remain stable during high volatility in the equity market, is utility. In most cases, utility companies tend to have a low Beta, which means that they can withstand better the turbulent times.
From the technical side, the share price is currently trading within a range, roughly between the 10.54 and 12.11 levels. That pattern has been in play from around the beginning of June. This week we are noticing that the stock is trading just slightly below the 200-day EMA and the upper bound of the range, at 12.11. Given that ENGI is very close to the upper side of the range, this increases the chances for the stock to move further up. However, we would prefer to see that break first, before examining higher areas. Until then, we will remain neutral.
A strong push and a daily close above the 12.11 barrier, marked by the upper bound of the aforementioned range, could attract a few extra buyers, as such a move would also confirm a forthcoming higher high. The stock may then drift to the low of March 11th, at 12.71, a break of which might open the way to the 13.60 level. That level marks the low of March 9th.
Looking at the RSI and the MACD on our daily chart, we can see that the both are pointing slightly higher. In addition to that, the RSI continues to run above 50 and the MACD is sitting above zero and its trigger line. The two oscillators seem to be in support of the idea of seeing some upside in the near term. That said, as mentioned above, we would prefer to wait for a break of the 12.11 hurdle first, before aiming for higher levels.
On the downside, if the price slides back below the 11.68 hurdle, marked near the highs of July 6th and 21st, that may lead to some further declines within the aforementioned range. That’s when we will examine a potential slide to the 11.26 zone, a break of which may set the stage for a test of the 10.54 level, which is the lower side of the range.
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