The Case Against Cable…and Satellite
Of course we all know most of the arguments against cable and satellite like ridiculous prices for 800 channels which half the time not a darn thing on worth watching. Or the crappy customer service. Or the revolution quickly taking place with streaming services and the online video revolution. Those arguments will take place in countless venues. I just want to talk about what I am seeing this weekend in their charts. Now, many of them have been on a run recently, and longer term might stay on that track. They do make a lot of money, but running through their charts back to back showed some warning sign that suggest we watch for price breaks.
The first chart I looked at is actually one of the best in the space right now, but still has many signs that suggest it may be time for a pullback at least. $TWX has been on a run since June still looks okay longer term, but Wednesday was your first warning sign. The Gravestone Doji triggering all types of divergences. MACD on the Daily fired divergences on both the indicator and the histogram.
The RSI is also diverging on both a long and short term time frame. A look at the weekly also Diverging off highs and a weekly Gravestone Doji. Now these need confirmation, but if we get it, looks like the bottom of the channel is the target at 44, and a break below there opens it up to close the gap at the beginning of the channel at 41.60. RSI had its second failure swing under 60.
Weekly also showing the momentum issues as the MACD didn’t even turn up on the retest of the highs. This looks like a better short to me than $TWX, Maybe a pairs trade for those so inclined.
Then there are the satellites with a similar set up, $DISH looks like the stronger of the two with daily vulnerable below 36 to gap fill at 34.69 with 34 a bigger level. Weekly still looks solid at the moment here.
Finally we have $DTV with a series of lower highs and lower lows on the daily. Continues to struggle at the 50 level as the MACD right at the flat line and RSI rolling before 60 leave this as the better short.
That weekly bear flag is also below the 20sma. Possibly another pair.
So just just like the argument for or against the companies practices, there is also a battle between bulls and bears. So right now it these charts look a little heavy and might want to come on more. If there are two good short ideas. And if they happen to catch a bid very soon, then stick with the the ones near new highs.
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(All market data above are derived from Stockcharts.com, Esignal, and Reutersdatalink)
