The British Gas owner has a lethargic share price – but could pick up if it does this.
A Google search for Centrica (LSE:CNA) discovered they define themselves as an electrical services company, a neat trick for the folk behind British Gas.
It's funny, one would suspect a company specialising in energy would experience a flourish to their share price during the cold months of winter. In the case of Centrica, this is rarely the case. We needed to travel back five years before the share price experienced a cheerful first quarter. Maybe they are due a break in 2021.
But, so far, things tend to reflect the lethargic motion of the FTSE rather than cold, long, nights requiring lots of electricity and gas for heating and lots of income for this multinational. Perhaps this year shall be different!
- Why reading charts can help you become a better investor
- Best and worst FTSE 250 stocks of 2020
- 41 growth stocks for 2021
- Big investment trust themes to watch in 2021
Presently trading around the 50p mark, the share needs to move above 54p to convince me of happy days ahead. In such a scenario we're looking for recovery to an initial 58.5p with secondary, if exceeded, calculating at a longer term 73p. In the event of this triggering, visually the tightest stop looks like 40p.
The implications, should the 40p level break, are of coming weakness to an initial 31p, rather effectively matching the Covid-19 drop from last year. Should 31p break, our final hope for a bounce resides at an ultimate bottom of 18p.
By most standards, Centrica’s share price dwells in a dangerous place currently but visually requires little work to extract itself.
Source: Trends and Targets. Past performance is not a guide to future performance
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
Alistair Strang is a freelance contributor and not a direct employee of interactive investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.