PG&E stock rose 1.3%
On October 9, fire investigator Cal Fire said that PG&E’s (PCG) sagging power lines and heavy winds started the Cascade fire in October 2017. However, Cal Fire mentioned that it didn’t find any violations of the Public Resources Code. The Cascade fire in Yuba County destroyed 264 structures and claimed four lives. Cal Fire already said that PG&E was responsible for 16 other fires in 2017. The cause of the Tubbs fire, the most devastating fire, is still under investigation.
PG&E stock has risen almost 20% in the last three months and outperformed peer utilities (XLU). The California governor passed a wildfire-related bill last month. The bill strengthens the state’s ability to prevent and recover from wildfires. The legislation also helps pass utilities’ wildfire-related liabilities on to the customers by issuing bonds. The bill is expected to ease the concerns about PG&E’s multi-billion-dollar liability, which could push the utility into bankruptcy.
What’s next for PG&E stock?
Currently, PG&E is trading at $48.55, which is nearly 7% and 11% above its 50-day and 200-day moving average levels, respectively. Both of these levels around $45.48 and $43.60 could act as a support for PG&E stock in the short term. The stock is trading in the “overbought” zone with its RSI (relative strength index) at 74. A stock is considered “oversold” when its RSI drops below 30 and “overbought” when its RSI rises above 70. Extreme RSI values could suggest an impending reversal in the stock’s direction.