IFM Offer Gives A Boost To Naturgy Energy Stock | Technical Analysis
This week, the Naturgy Energy Group SA (BME: NTGY) fell under the spotlight, when an Australian investment firm, IFM Investors, offered to buy a 22.69% stake in the Spanish natural gas and electrical energy utilities company. NTGY is currently trading near the 22 EUR mark, however, before the news release, the stock was trading at around 19 EUR per share. The IFM Investors offered to buy the proposed stake in the company at 23 EUR per share, however, it seems that this is not something that the current shareholders of Naturgy might go ahead with. Currently, there are three major shareholders of Naturgy. GIP and Rioja Acquisition own around 21% each, and the Criteria Caixa, whose parent company is Caixabank, owns around 24%. The first two shareholders are rejecting the offer, as they say, that bringing another private equity fund into the structure could damage the already-successful Naturgy’s strategy. And, of course, it would leave the two current owners with lower company stakes, comparing to the others.
Given that it doesn’t seem likely that the sale would go through, still, this publicity might work well for NTGY. The company stock was already seen as a good renewable-energy stock for an investor’s portfolio. The rejection of the offer from the Australian major investment firm could be seen as a positive for the stock’s near-term outlook.
The current technical picture shows that, today, the stock is correcting slightly lower. However, if NTGY moves a bit further south, but remains somewhere above a short-term upside support line, drawn from the low of November 9th, this may attract some buying interest back into the game.
A small push lower might send the share price to the 20.71 zone, marked by the high of January 12th. If that zone provides good support, a rebound from it could be possible. NTGY may then rise back to Tuesday’s high, at 22.57, a break of which might clear the path to some higher levels, as a forthcoming higher high would be confirmed. That’s when we will aim for the 23.22 hurdle, or even for the 24.75 mark, which is the highest point of 2020.
The RSI and the MACD, on our daily chart, are showing positive price momentum. The RSI is well above 50, despite currently being a bit flat, but the MACD continues to point higher, while running above zero and its trigger line.
On the downside, if the stock suddenly drops below the aforementioned upside line and then falls below the current lowest point of this week, at 18.87, that may spook new buyers from the field temporarily. NTGY might then drift to the area between the 17.69 and 17.92 levels, which if fail to provide support and break, could open the way to the 16.92 hurdle. That hurdle marks the low of November 9th.
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