Trade of the Day: VOD Stock May be Staging a Big Turnaround

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Vodafone Group Plc (ADR) (VOD) — VOD stock jumped 2.6% on Tuesday in direct opposition to the drubbing received by the broader market. Buyers rushed in after the international wireless telecommunications services provider reported its first increase in full-year revenue and earnings since 2008.

For the fiscal year ended March 31, Vodafone posted 2.3% growth in revenue, while earnings before interest, tax, depreciation and amortization rose 2.7%. The company also announced its 10th consecutive annual dividend increase.

Investors found much to cheer about in the annual report, with Vodafone CEO Vittorio Colao saying on a conference call, “This has been a year of strong execution.”

The company’s decision to spend £19 billion on a two-year project to improve its mobile networks and customer service and add fixed lines for cable television and broadband appears to be paying off. Vodafone announced 1.3 million new broadband customers signed up in the fiscal year, bringing its total to 13.4 million.

The U.K.-based company, which is the world’s second-largest mobile carrier, also said it plans to expand 4G coverage in emerging markets and roll out 5G mobile services in Europe as early as 2020.

S&P Capital IQ Equity Research rates VOD stock a “Buy” with a 12-month price target of $40.

Turning to the chart, VOD has been in a downtrend since hitting a multiyear high above $42 in February 2014. But the post-earnings rally resulted in a breakaway gap with very high volume confirming it. And MACD issued a buy signal as momentum shifted to accumulation after years of selling.

Gaps are often partially filled within a few sessions, so traders should look to buy VOD stock on a pullback to $33 with a target of $38 for a projected gain of more than 15%. Investors can buy shares as a long-term holding for capital gains and income.

VOD Stock Chart
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Article printed from InvestorPlace Media, https://investorplace.com/2016/05/vodafone-group-plc-adr-vod-stock-trade-day/.

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