Hard times for ENEL, the electricity giant which also controls Endesa, a leader in the Spanish market.
The surge in the prices of raw materials and the intervention of the Draghi government, which will soon be followed by Sanchez to cut the exponential increase in electricity in Spain, as in Italy, has obviously aroused great fear on the markets. causing a very important sell-off for the stock which, on the market since April, lost 26%.
The price has reached a very attractive level, especially in terms of volume. But this is one of those cases where fundamental factors are more relevant than technical ones.
The real risk for Enel, with the so-called “clawback” by the Spanish government in primis, is a loss of over 200 million euros before taxes for 2021 and the same for 2022 (source borse.it).
Stay away then? It depends.
If we talk about trading, certainly Enel is not such a fascinating title in the short term.
In the case of a long-term investment, the situation is different.
Personally, I will enter levels should the price fall further, in consideration of the fact that Enel has already foreseen an important dividend for next January and that the price of raw materials will not remain high forever.
Speaking of interesting levels to enter and/or accumulate are:
– 6.74 (level already tested)
– 6 (important post-crash accumulation level for the covid)
– 4.16 (historically key level of re-start of the title) and POC of the last 5 years.
DISCLAIMER: I am not a financial advisor nor a CPA. These posts, videos, and any other contents are for educational and entertainment purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments.