Warner Bros. May Have Downside Risk
Warner Bros. Discovery spent much of 2023 in a tight range, but now it could be moving again.
The first pattern on today’s chart is the series of higher lows between December and late August. The media company began September by moving under the line, and has shown signs of trending lower since. Some chart watchers may now view that price action as the breakdown of a bearish flag.
Second, a rally failed around $12.14 in mid-September. The level had marked the lows in July and August. Has old resistance become new support?
Next, several moving averages (MAs) were on top of each other when the drop began. That shows how WBD had a neutral trend for several months, which may open the door to a period of directional movement.
Fourth, MACD has been falling.
Fifth, the stock deviated from the S&P 500 by failing to rally after May. (The year’s high occurred in February.) That may reflect a lack of relative strength.
Finally, WBD’s debt load is almost twice its market capitalization. That could create risks if interest rates remain high.
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The first pattern on today’s chart is the series of higher lows between December and late August. The media company began September by moving under the line, and has shown signs of trending lower since. Some chart watchers may now view that price action as the breakdown of a bearish flag.
Second, a rally failed around $12.14 in mid-September. The level had marked the lows in July and August. Has old resistance become new support?
Next, several moving averages (MAs) were on top of each other when the drop began. That shows how WBD had a neutral trend for several months, which may open the door to a period of directional movement.
Fourth, MACD has been falling.
Fifth, the stock deviated from the S&P 500 by failing to rally after May. (The year’s high occurred in February.) That may reflect a lack of relative strength.
Finally, WBD’s debt load is almost twice its market capitalization. That could create risks if interest rates remain high.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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