A defensive favourite powered by attractive yield

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A defensive favourite powered by attractive yield

National Grid (LSE:NG.)

It can be quite strange, how some days the FTSE (UKX) shows as 1%+ up yet from our perspective, nothing is happening. This nonsense occurs when the market moves within trigger levels, essentially pretending to be interesting. On Monday, the action happened between 8:09am and 9am and a trading range of 28 points.

Or in plain English, nothing actually happened.

But with National Grid (NG.), something almost did occur to judge by emails received. This lot are "one of ours", a share we monitor on a daily basis for clients. For some time, we've been warning this is on a path to 690p with secondary, when broken, at a bouncy bottom hopefully around the 630p mark.

The dashed line across the bottom of the screen dates from 2003 and certainly gives hope to some justification will be found for a bounce should 630p - or so - make an appearance eventually. Alas, we've a slight concern about the 630p ambition as it catapults the share price into a region where 490p makes a long term attraction, rather effectively matching the lows of 2010 and signalling a viable entry point. If it even appears!

There's very little positive showing against this lot as the price needs to better red at 950p currently before we'd abandon our expectation against further drops coming. If looking for straws to clutch, the immediate downtrend (blue) is currently 850p, suggesting the share needs to grow by a quid just to ease the immediate pace of descent.

 

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Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.


Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

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