Satellite TV subscription company Dish Network (DISH) outdid the analysts on Tuesday with its third-quarter earnings report. DISH earnings came to $315 million, or 68 cents per share, vs. a year-ago loss of $158 million, or 35 cents per share. Revenues rose 2% to $3.60 billion. Analyst expectations called for DISH earnings of 45 cents per share on revenue of $3.59 billion, thus the company beat on both fronts.
While cable service providers continue to lose subscribers, the story with satellite TV providers is much different. In the third quarter, DISH’s pay-TV customers increased by 35,000, a respectable amount in absolute terms and a blowout number in relative terms compared to cable companies. Subscriber growth for DISH was tremendous compared to analyst estimates, which had DISH losing nearly 40,000 subscribers in the period. The company added subscribers in both video and broadband services in the quarter.
Somehow even more promising are the charts of DISH stock, on all time frames. They look encouraging and — barring any major bearish reversal in the near future — appear to telegraph a year-end rally.
The same, might I add, applies to the charts of DirecTV (DTV), the largest U.S. satellite TV subscription service provider and thus the biggest competitor to Dish Network.
The long-term logarithmic weekly chart of Dish Network stock looking back 15 years shows an area of resistance (black dotted line) ranging anywhere from $47 up to roughly $50.50. With this year’s sharp incline in the stock of almost 40%, DISH managed to bump into the upper end of this long-term area of resistance. As triple tops are a myth as far as technical analysis is concerned, it could well be that the third time is the charm, and that this third rally into this resistance area over the past 13 years leads to a major breakout.
On the daily chart, DISH stock has held onto its 2013 uptrend line during the late-September slump and rallied strongly back to its early-September highs. In reaction to the positive earnings report Tuesday, DISH stock frolicked higher to the tune of 6%, breaking to a fresh year-to-date high, on greatly above average volume. On Monday, DISH held its 50-day simple moving average (yellow line), which was followed Tuesday morning with an up-gap open and a daily close at the day’s highs and breakout past a two-month resistance level at roughly $49.50.
Given this newfound momentum, Dish Network stock looks promising to go higher in coming weeks.
Learn more about the strategies Serge Berger uses to create profits in the market every day. Download his trading plan in the “Essence of Swing Trading” eBook by clicking here. At the time of publication, Berger had no positions in the securities mentioned.