3 Media Stocks in Downward Spirals

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In the media space, the current big, scary buzzword is “cord-cutting.” More and more consumers (particularly millennials) are foregoing pricey cable packages in favor of Internet TV streaming packages.

corporate earnings dow stocks to sell short interestThis new normal is being reflected in many key players’ earnings reports … and, as a result, basically every media stock that isn’t Netflix (NFLX) is getting hit hard.

As such, the Profit Scanner powered by Recognia has identified 3 media stocks that have been absolutely flattened — and aren’t out of the woods yet.

To steer clear of the pain in these media stocks (or perhaps to profit from the pain with trades), read on for details.

Media Stocks: Disney (DIS)

media-stocks-disDisney (DIS) had been one of the strongest stocks on the board for much of the year … and then August happened. DIS gapped down hard on Aug. 5 after a disappointing Q2 report. Since then, the stock has been giving off lots of bearish signals.

The latest came on Wednesday, when the Profit Scanner spotted a Megaphone Top pattern on Disney’s chart. For the previous three months, DIS had been swinging wildly higher and lower — but ultimately broke below its lowest low. This event suggests a more decisive downtrend over the intermediate term.

Specifically, the Profit Scanner is looking for DIS to drop another 12% to 15% in the next three or four months, to the $92-$95 level.

Media Stocks: AMC Networks Inc (AMCX)

media-stocks-amcxAMC Networks Inc (AMCX) is in the same boat as DIS stock. The cable network that brought us Mad Men, Breaking Bad and The Walking Dead (and not a lot since then) has been struggling this summer.

Momentum has been bearish throughout July and August, and AMCX stock broke the 20-day, 50-day and 21-week moving averages last week. Then, on Aug. 12, AMCX completed a Megaphone Top, just like DIS.

In this case, the Profit Scanner is looking for a 17% to 20% drop in the next four months, bringing AMCX stock to $60 or $62.

Media Stocks: Time Warner Inc (TWX)

media-stocks-twx

Last but not least is Time Warner Inc (TWX), the conglomerate’s media content arm (not to be confused with Time Warner Cable). July and August have been rough for TWX, too; things started looking up on Monday, but then Tuesday TWX stock dropped 2.9% to erase those gains.

Tuesday’s action brought a bearish Double Moving Average Crossover, in which TWX’s 21-day moving average crossed below the 50-day. When a shorter-term moving average drops below a longer-term one, it confirms that the stock is in a downtrend. There’s no particular price target here, but this event certainly doesn’t bode well for TWX in the near term.

Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/08/media-stocks-downward-spiral/.

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