If you have been following the share price of Contact Energy Ltd [CEN.NZX] over the last few years you would have noticed a good short-term trading pattern that many have exploited to make some fast money. Since March 2009 the share price has been up and down like a cheap K-Rd hooker on multiple occasions, ranging between around $5.50 at its lows to around $6.50 at its highs. (see chart above)
Since April 2010 though the stock has been trading at the lower end of this range and seems to be marking time for whatever reason.
If you look at the historical 10 year chart below you will see that the last time this stock settled at any share price range for an extended period was back in 2000-2001.
The historical nature of this stock is for it to keep climbing in share price.
The market seems to be hanging back and waiting to see some news, either good or bad, that will move the share price in the appropriate direction.
As I have already said, CEN stock really has been marking time since March 2009 when the aforementioned trading pattern began but the tighter trading range of the last 6 months or so really has made this stock worth watching closely.
For those of you wanting this stock for the long term it will perform well and the probability that its majority owned Australian parent Origin Energy Ltd [ORG.ASX] will make a takeover move will be icing on the cake. Its current share price would make a move by the long termers a wise one.
On the other hand if you are one of those short term traders that have made money on this stock since early 2009 beware that the trading pattern has been broken and you could well see a dip below the $5.50 floor.
Contact Energy @ Share Investor
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