Sempra Energy is a diversified utilities company with more than 35 million customers spread across California and parts of Texas. It owns and operates utilities and energy infrastructure such as power plants and natural gas pipelines. Power and energy are core sectors of any economy and the overall economic development leads to a slow and gradual growth in demand for energy. Natural gas is also expected to be a growing market long term. Sempra Energy, therefore, seems well-placed for future growth.
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The long-term uptrend that Sempra Energy’s stock has been in is clearly visible on its 20-year monthly chart. More recently, the stock had fallen significantly by 30%, from the highs of 160 in February 2020, to a low of 113 in March 2020. This fall took the price below the bottom of the long-term trend and also broke a historic resistance level at around 115, denoted by the dotted red line.
In April 2020, the stock has bounced back up by more than 15%. In doing so, it has crossed the area of value at 115. Going forward, there seems to be no visible resistance until the top of the long-term trend at 163. A long position can be initiated with a stop loss somewhere below the 115 level.
Positions taken at $126.97 with stop loss 22% below at $99. Short term investors put in a take profit order at $165 giving a profit of 30%