Insights for March 2019

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The national grid plc is an ‘Avoid’ for the time being as the stock looks fairly valued or slightly over valued for the time being. The stock finished trading on the London stock exchange at 849 p a share, up by 0.17% compared to the previous close.  Currently. The stock has been trading above 20 day moving average (DMA), 50 DMA and 100 DMA of 847.0p, 814p and 822 p respectively. However, in technical terms or charting, we see a ‘double top’ pattern forming right now and the stocks seems topped out on the charts. As per the pattern, the stock should face critical hurdle at 862p and a failure to surpass that level might confirm the respective pattern and the stock may head towards a significant correction. However, the support levels are placed at 810p-820p zone. In our view the stock might correct up to 810p -820p and if the respective level is sustained then the investors or traders can start initiating fresh positions too.

Let’s throw some light on the latest financial results of the company. The company announced its latest half year results on 8th November 2018. As per the results, the underlying operating profit is down by 6% in 2018 vs 2017. However, the underlying EPS is up by 1.2% in the year 2018 compared to a year ago. The operating profit came down because of the impact of US tax reform, and £56 million higher costs from a number of storms. The majority of storm costs are recoverable under existing regulatory mechanisms. (Read more)

Topics: Analysis
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