Interactive Investor

Should you be optimistic about Centrica and its 8% dividend yield?

14th November 2018 08:55

Alistair Strang from Trends and Targets

It's been a hot and cold year for this utility company's share price. Chartist Alistair Strang assesses how things could potentially warm up.

Centrica (LSE:CNA) 

Sometimes, setting a big picture target can prove quite illuminating. In the case of Centrica, the energy supplier, we'd speculated during 2017 of the price bottoming at 102p. Some strength has proven evident and the share bottomed at 120p instead!

Since 2013, there has been a very rigid downtrend, one which Centrica's share price has finally managed to better. While we're not able to compute an immediate return to the land of milk and honey for the price, some hope for the future is very evident.

The immediate situation suggests the shares now need only trade above 157p to enter a cycle to an initial 168p. Secondary, if bettered, calculates at 189p.

Unfortunately, this target is slightly vague, thanks to a manipulation gap. If positive news were involved, the share price could easily accelerate towards 205p instead.
 
Presently trading around 154p, the price needs below 144p to suggest it's all going wrong, this suggesting coming weakness to 133p initially and guess what? Secondary is at 102p...

For now, some slight optimism appears possible.

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. 

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