PG&E Stock Continues to Look Weak, Trades in the Oversold Zone
PG&E’s moving averages
PG&E (PCG) stock has managed a marginal recovery. The stock had fallen due to the company’s potential involvement in the California wildfires last month. On November 8, 2017, it was trading 13% and 16% below its 50-day and 200-day moving average levels, respectively. The large discount to both the key moving averages shows the weakness in PG&E stock.
PG&E’s 50-day moving average level of ~$64.50 will likely act as a resistance for the stock in the near future. Currently, it’s trading at $55.83.
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PG&E’s 50-day moving average breaking below its 200-day moving average level can be considered as a bearish sign for the stock going forward.
Relative strength index
PG&E stock is trading in the oversold zone given its current RSI (relative strength index) at 28.
According to technical analysts, RSI values below 30 indicate that the stock is trading in the oversold zone, while RSI values above 70 indicate that the stock is trading in the overbought zone. RSI levels at extremes might indicate a change in the stock’s direction.
The wildfires in northern California sent PG&E stock falling after state fire investigators probed PG&E’s power lines in the area as a possible cause of the fires. During its 3Q17 earnings call, PG&E updated its GAAP earnings guidance range to $3.36–3.56 per share due to the reinstatement of the company’s liability insurance following the northern California wildfires. However, PG&E’s management claimed that it’s still too early to discuss the company’s potential liability. The utility beat analysts’ earnings estimate for 3Q17 and reported earnings per share of $1.12 for the quarter. PG&E posted 19% earnings per share growth year-over-year in 3Q17.