PCG overbought

There was significant downward pressure on PG&E (PCG) stock in January before it filed for Chapter 11 bankruptcy protection. The stock, which touched a multiyear low of ~$5 in mid-January, recovered to ~$24 last week, implying a gain of almost 400% in just three months.

Where PG&E Stock Might Go from Here

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The stock is currently trading in the overbought zone with its relative strength index at 71, indicating a stock’s impending reversal. It is currently trading at $23.41, almost 21% above its 50-day and 22% below its 200-day simple moving average levels.

Analysts seem cautious

Wall Street analysts have given PCG a price target of $22.0, indicating a downside of almost 6% for the next 12 months. Of the total 13 analysts tracking PCG, 11 recommended the stock as a “hold,” while two recommend it as a “buy.” None of them have given a “sell” recommendation to the bankrupt utility as of April 29.

So far this year, PG&E stock is down about 2%, while Sempra Energy (SRE) and Edison International (EIX), peers in the state, are up ~18% and 12%, respectively, in the same period. XLU is up 10% YTD.

While PG&E’s board restructuring continues, its stock could stay volatile. PCG’s implied volatility touched 70% last week, whereas broader utilities’ (XLU) average volatility was 11%.

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