A key level of support has formed in the chart of AMC Networks (AMCX). If this support level is breached, a breakdown is expected.
AMCX is engaged in producing programming and movie content. It owns and operates various cable televisions, including flagship AMC, WE tv, BBC America, IFC, and SundanceTV.
AMCX just released its latest financial results this morning, with EPS of $1.32, beating the consensus analyst estimate of $1.08. Earnings were down 43.3% year over year though. Revenue came in at $654 million for the quarter, which was down 9% from the prior year quarter. The company has made progress on its digital initiatives as it expects 5.0 million to 5.5 million paid subscribers by year-end for its portfolio of streaming services.
The form had cash and cash equivalents of $1.1 billion as of the end of the quarter. This was an increase from the prior quarter. Free cash flow was $595 million, which was also an increase from $227 million last year.
Earnings and revenues are expected to be down for the year, but are forecasted to grow 9.7% and 6.3% next year, respectively. AMCX has a very low P/E ratio of 6.14 with a PEG forward ratio of 1.72.
The stock is showing bearishness over the short, mid and long-term, which is reflected in our POWR Ratings, with a “Strong Sell” rating, and a grade of “F” for Trade Grade and Buy and Grade.
Take a look at the 1-year chart of AMCX below with added notations:
Chart of AMCX provided by TradingView
Over the past 7 months, AMCX has formed a key level of support at $20 (green). The stock has rallied off the mark on several occasions, and now it looks like it may be coming back down to the $20 level again. If the $20 support level were to break, lower prices should come for AMCX.
If the stock were to break below the support, a trader could initiate under $20 with the expectation of a breakdown.
Want to Discover More Great Trades?
I have explored virtually every flavor of technical analysis and chart pattern known to mankind. The sad fact is that the vast majority of them don’t work at all.
That is why I recently put together this special report to help investors focus on the only 5 chart patterns that matter…the ones that lead to the most timely and profitable stock trades. Click below to get your copy now!
5 WINNING Stock Chart Patterns
Have a good trading day!
Good luck!
Christian Tharpe, CMT
AMCX shares rose $0.75 (+3.53%) in premarket trading Monday. Year-to-date, AMCX has declined -46.20%, versus a 4.00% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp, CMT
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock.
The post The Bearish Case for AMC Networks appeared first on StockNews.com