Galp Energia SGPS SA (ELI: GALP) is a Portuguese oil and gas supplier. The company was formed in 1999 after a merger of the Portuguese energy giants Transgas, Petrogal and Gas de Portugal. Today, Galp Energia is actively trying to diversify its energy resource portfolio by making a big bet on renewables, such as solar and wind. Also, the company is considering their expansion in the battery-development field, due to its increased popularity. However, Galp Energia is not the only one in the field and it has still a long road ahead, before the energy giant could compete with its peers on the Pyrenean peninsula, such as Iberdrola SA (BME: IBE) and Siemens Gamesa (BME: SGRE).
The technical picture of the GALP on our daily chart shows that the share price is currently testing one of its key support areas, at 9.200, marked by the lowest point of April. At the same time, the stock is trading below some of its tentative downside resistance lines, a short-term one taken from the high of June 1st and a medium-term one drawn from the high of March 15th. As long as GALP continues to trade below both of those downside lines, we will continue aiming lower, especially if we see a daily close below that 9.200 support zone.
If, eventually, we do see a daily close below the 9.200 hurdle, this may keep new buyers away from entering for a while. GALP might fall to the low of February 23rd, at 8.956, or even to the 8.553 area, marked by low of February 10th, where a temporary hold-up could happen. However, if there are still no new buyers around that price, the stock might slide further, potentially aiming for the high of February 8th, at 8.396.
At the time of writing, the RSI and the MACD are both pointing lower. In addition to that, the RSI is below 50 and the MACD is below zero and its trigger line. The two oscillators indicate increasing downside speed of the price, which supports the above-mentioned scenario.
On the upside, in order to consider a correction higher, a break of the aforementioned short-term downside line would be needed. Also, a push through the 9.670 barrier, marked by the high of June 25th, may invite more new buyers into the arena. GALP could then travel to the 9.885 obstacle, a break of which might set the stage for a test of the 10.100 level, marked by the high of June 16th. Around there the stock may test the previously discussed medium-term downside resistance line, which could provide additional resistance.
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