Vicat Shares Plunge 12% in a Week, Dragged Down by Soaring Oil Prices
Vicat's stock experienced a sharp decline this Tuesday, March 3, dropping 4.51% to 65.70 euros by midday, in a market environment deteriorated by tensions in the Middle East. The cement group's stock has intensified its weekly decline, now reaching nearly 12%. This drop brings the share price close to its 200-day moving average, a key technical level.
Impact of Rising Oil and Natural Gas Prices
The significant increase in oil and natural gas prices, linked to military operations in Iran and the circumvention of the Strait of Hormuz by shipowners, directly pressures energy-intensive industries. Cement is one of the sectors most exposed to the rising cost of energy, as the production of clinker requires very high temperatures fueled by fossil fuels. With Brent crude over $80 a barrel and a 25% surge in European natural gas prices, the cost structure of cement manufacturers is mechanically burdened. Vicat, operating in twelve countries across four continents, is particularly sensitive to these fluctuations. The group, which will publish its first-quarter sales figures on May 4, will then need to clarify the potential impact of this inflationary push on its margins. The general assembly, scheduled for April 10, might also provide an opportunity to discuss the management of these additional costs.
Technical Analysis of the Day's Decline
From a technical standpoint, today's decline has pushed Vicat's share price below its identified support at 68.80 euros, which also corresponded to the lower boundary of the Bollinger Bands at 68.75 euros. This technical break enhances the short-term bearish signal. The 200-day moving average, located at 65.18 euros, now serves as the next potential support point: the stock is only a few cents away. The RSI, an indicator measuring the ratio between recent upward and downward movements, has fallen to 28, well below the conventional threshold of 30 that defines oversold zones. This level reflects the magnitude of the selling pressure accumulated in recent days. Meanwhile, the share price is far from its 20-day and 50-day moving averages, at 74.76 and 76.13 euros respectively, confirming the significant gap with the medium-term trend.
