Naturgy Energy Group SA (BME: NTGY), formerly known as Gas Natural Fenosa, is one of the largest utility companies in Spain, using natural gas and electrical energy. Although its main operations are in Spain, it also has exposure in distributing gas in Italy, France, Germany and Latin America. Given the current global situation with the coronavirus, the company might actually benefit from it, as people would be forced to stay at home, increasing the household energy usage. The upcoming winter season might also push household consumption a bit higher. In addition to that, the utility company stocks are often considered as defence stocks during harsh economic times, when certain booming sectors tend to run out of steam. That’s why NTGY might be an interesting stock to continue monitoring.
The technical picture of Naturgy Energy Group SA stock shows that it is as currently testing one of the key resistance areas. At the same time the share price continues to balance above a short-term upside support line drawn from the low of August 28th. Although NTGY is showing willingness to push further north, we would prefer to wait for a move above the 18.10 resistance area first.
If we see the share price pushing through that 18.10 barrier and then ending a trading day above it, that may attract more buying interest into the game. The stock might then drift to the current highest point of October, at 18.33, which could be seen as a temporary pit-stop for the buyers, who could possibly be heading their way to the 19.48 hurdle. That hurdle marks the high of March 9th. If investors are still interested in the stock even at that level, this may result in a further move north, where the next potential target could be at 19.85, marked by the low of March 6th.
The RSI is currently pointing higher, while sitting above 50, suggesting that price momentum is positive. However, the MACD supports the idea of waiting for a push above the 18.10 barrier first, as the indicator is just fractionally below zero and its trigger line at the time of writing, but has been moving higher since the second half of last week.
Alternatively, if the aforementioned upside line breaks and the share price slides below the 17.11 zone, marked by the low of last week, that might spook potential new buyers from the arena for a while, as such a move may increase the stock’s chances of drifting lower. NTGY could then travel to the 16.80 obstacle, or to the 16.51 area, marked by the low of September 21st. If the decline continues, the next possible support area could be seen near the 16.06 and 15.87 levels, marked by the lows of September 9th and August 28th respectively.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
There are risks involved with trading of cash equities. Past performance is not indicative of future results. You should consider whether you can tolerate such losses before trading. Please read the full Risk Disclosure.
Copyright 2020 JFD Group Ltd.