I won’t make this a long winded effort as most Readers will have a pretty good idea what National Grid (NG.) is. You will probably know I am generally Bearish on the Markets at the moment and I am not in a Buying Mood overall - but I will nibble when I see good Value appear.
I bought NG. for my Income Portfolio (full details and constituents of this Portfolio can be found on the ‘Trades / Portfolios’ page of this Website) as the around 5% Dividend and stability of the Business seems a nice ‘Steady Eddie’ to give some Bedrock for tough times. Long Term Portfolios need to be designed for all Weathers, not just for when everything is Sunny.
The Stockmarket has felt a bit Solar Powered for ages……..
The key thing here is the Divvy. If you look at the ShareScope Numbers screenshot below, you will see the Divvy Yield is forecast to be 5.03%, 5.16% & 5.30% over the next 3 years, based on the Price at 853p. I paid 855p so this is close enough. In these days of low Yields, this seems fair enough for the Risks involved - mainly Political.
The National Grid is one of the most important parts of Infrastructure in this country - the lights would literally go out if it were to have problems. Consequentially, as Politicians batter the Energy Companies that supply direct to Voters, they have been remarkably quiet on NG. It seems likely they realise the Risk of causing problems here. It is not Risk Free, but seems Low Risk anyway.
For a bit more detail on this, head over to this great piece from JJIS (@compoundincome on Tweeterer) http://www.compoundincome.org/blog/get-a-47-index-linked-yield-and-help-keep-the-lights-on
If you look at the Chart below, you will see a cracking Uptrend Channel - we are near the bottom, good time to buy I think. Don’t worry about the Blue line - this is the Sector Line.
I guess the point of the Black Arrow is that it marks the Downtrend Channel Resistance line that the Price needs to break out of for the Longer Term Uptrend to continue. In Textbook Trading terms, you would wait for this Downtrend Channel to be broken out of before buying. However, I am not doing Short Term Position Trading here - this is a Divvy play for my Long Term Income Portfolio - so I am less bothered about Perfect Timing. The Yield here is what counts, and I am happy to have Locked that in.
The Blue Arrow points to an Inverted Hammer Candle - this is sign that the Downmove is coming to an end and will turn up soon - we shall see, although it looks promising.
The Blue Arrow in the Bottom Window shows that the MACD (Moving Average Convergence Divergence) is still heading downwards - again, I have jumped the Gun. The Red Arrow shows that the MACD lines are starting to curl the right way - this is however too feeble to base a Buy Decision on - as I said previously, my big driver here was to capture the Divvy Yield.
Right, that’s enough, I have another Blog Draft I want to crack on with.
Hope this quick blog gave some insights,