The National Grid share price is in the spotlight today as the utility company invests billions in the electric car revolution. NG shares ended the day at 829p, which was slightly higher than the intraday low of 805p.
What happened: National Grid is a power company that serves millions of people in the UK, US, and other countries. The company made headlines yesterday when it announced that it would divest its gas network and buy WPD for 7.8 billion pounds. It will also sell its PPL Group for 2.7 billion pounds and its majority stake in National Grid Gas.
National Grid already owns high voltage transmission networks and it hopes that the WPD acquisition will help to diversify its earnings. Notably, this acquisition will help it become a major player in the fast-growing EV industry in an indirect way. Also, by selling its US business, the company is increasing its bet to the UK at a time when the country is emerging from the pandemic.
The announcement came two weeks after Fitch downgraded National Grid from BBB to BBB-.
National Grid share price forecast
Turning to the four-hour chart, we see that the National Grid stock price has been in a downward trend recently. And yesterday, it erased some of the gains it had made in the past few days when it rose from 805p to 855p. The stock remains slightly below the 25-day exponential moving average. The price action yesterday appears to have invalidated the inverted head and shoulders pattern that has been forming recently.
Therefore, in my view, the outlook for the stock is neutral. Another drop below yesterday’s low of 805p will mean that bears have prevailed, which will see it drop to 750p. However, a move above 854p will mean that bulls have prevailed, which will see it rise to 900p.
Don’t miss a beat! Follow us on Telegram and Twitter.
NG share price chart
More content
- Download our latest quarterly market outlook for our longer-term trade ideas.
- Follow Crispus on Twitter.
- Do you enjoy reading our updates? Become a member today and access all restricted content. It is free to join.