Companhia Energetica de Minas Gerais Cemig (CIG)

[TMaga]

Fidelity just dropped CIG from their portfolio...Something weird going on here....Very difficult to get a handle on foreign companies and what is going on with them.

[newey_to_the_block]

Pretty rough day here. Why the sudden drop?

[newey_to_the_block]

Great chart. Yes there was a 1:1 split just a couple weeks ago. Do you know when 4q or annual earnings come out? Maybe with some decent earnings we can bust out of this range, next stop 200 dmA!

[sharpshorts]

I like your HL...an MOF (money on the floor) and the subsequent HH...
Bullish T/A which could be the start of a new up trend.
Heavyish volume this year too. Will look at my favorite indicators for divergences.

Looks like it also broke the upper trend line of a declining wedge again too...then retraced back under it, retesting that area.
Usually I take this as a bullish technical event...but this also happened before, 3 months ago when CIG was over $9
(see my static chart on the post you replied to - Note - it appears that my chart and Finviz's are out of sync somehow - was there a split?).

Maybe buy stop it at Friday's high or ~@$5.75-80.
I still like the company - timing it right is always key...

[newey_to_the_block]

This just recently had a higher low and looks like it might turnaround with the RSI at 51 and the accum/distribution crossing. Thoughts?

[sharpshorts]

CIG - Added to My Stocks today. Great fundles under $10

Yearly and intra-day...to see if they update (from iHub news page)


Updating: (from Finviz.com)

[renoldman]

12.90 in pre-market.

As this is a Brazilian company, I will throw out the the obligatory .....

VAMOOOOO!

[renoldman]

I have done a little bit of digesting and reading to see how the change in regulation affects our company.

I think the changes really affect those that are in the Transmission of power.

Now, is CIG involved with this?

YES.

Now what does the changes in policy do?

The change in policies means that companies will not be paid as high of a percent compared to what they pay. The government will also review the real VALUE of the assets and pay based on their valuations.

As you can imagine this would be disastrous for a company that is focused on Transmission. Why? Because the cash generated is more or less like a fixed income asset, companies can not sell more, especially if their business is just transmission of power.

For CIG, the company's profit is obviously affected, but as the company is involved in the Distribution and Generation of power they will not be as affected as others.

In fact, the regulation may cause smaller players to exit the market which would give CIG the ability to grow.

Why? Because they can take on the transmission assets of other companies and still generate a profit due to efficiency.

So, CIG is likely to recover.

[renoldman]

Someone has a thumb on $12.50 should be an interesting 40 minutes or so.

[iownit]

Humming along now

[renoldman]

Let the chasing commence!

Thanks goes out to the big boys for the stop loss clearing .... Twas nice to add at $12

[iownit]

Got in @ $12.07. Going up

[renoldman]

I am thinking $12 is a nice price to hold, take a look at ELP.

Stocks seem to like whole number as support.

It is obvious that this was taken down in a search to set off stop losses.

Scratch out the flippers looking for quick gains.

[Globaltrnr]

Yup .. waiting to add when she settles ..

[renoldman]

Action looks like someone is trying to get us to hit the Low of the Day.

Meaning someone is trying to get stop losses going.

[Globaltrnr]

in with a very small position @ 12.42

[Globaltrnr]

Will sideline until it settles in.

[Globaltrnr]

I agree .. may be a great bounce play ..

[Globaltrnr]

Brazil cuts electric rates to spur economy
Published September 11, 2012
EFE

President Dilma Rousseff on Tuesday made official a reduction in electricity rates aimed at spurring economic growth and making Brazilian firms more competitive.

The reductions, 16.2 percent for households and 28 percent for businesses, will enter into force starting in January.

"We're taking timely and urgent measures that the crisis is imposing ... At the same time, we're promoting structural changes to support the Brazilian economy," Rousseff said.

"Cheaper energy means lower production costs, but it also means more resources to invest (and) to generate more and more jobs," with the resulting impact on the fight against poverty, she said.

Rousseff also said that this measure "will improve the country's participation in the international competition for markets," which will provide Brazil with "greater strength to confront the world crisis."

The president included this new measure in the initiatives adopted by her government to give a greater push to the economy, the growth of which this year has slowed and, according to calculations by private sector analysts, will only expand by about 1.65 percent in 2012.

Among those measures, she cited the process of reducing interest rates and other incentives, such as big tax breaks for different productive sectors.

The new measures and the $65 billion infrastructure plan announced last month will allow the country "to guarantee the continuity of the growth process with social inclusion," Rousseff said.

The announcement was made at an event at the presidential palace attended by almost all members of the Cabinet along with several state governors, dozens of lawmakers, businessmen and union officials. EFE

[renoldman]

The sell off here was too much too fast.

This should be back to $13 in short order.

There is a couple of decent sized orders that should create support.

Why did the sector of Brazilian utility stocks go down?

There was news report states that taxes were cut for producers.

This means cheaper energy for consumers and businesses.

If anything this should cause the stocks to go up.

Here is the article: http://in.reuters.com/article/2012/09/11/brazil-economy-electricity-idINL1E8KBALP20120911

With a juicy dividend of around 10% at these prices this is an easy buy and hold.

I believe this is the best one to buy as the sell off has been overextended here in comparison to the other names in the sector.