Discovery (DISCA) runs the Discovery Channel and multiple other networks and was reviewed in December. At the time my conclusion was that "the landscape for media/entertainment companies is changing quickly. A nimble approach is probably required. A strong close above $21 would be bullish for me, and a decline below $17 would reawaken the bear." Looking back over the past few months we can see (first chart below) that prices rallied above $21 and nearly reached the $27 area before turning sideways. Let's tune in again to see what may have changed.
In this daily bar chart of DISCA, below, we can see that the chart and the derivatives or indicators have been weakening since late January. The slope of the 50-day moving average line turned negative or bearish in late March and the 200-day moving average line has been negative since last August. The daily On-Balance-Volume (OBV) line also peaked in late January and has been drifting lower telling us that sellers of DISCA have been slightly more aggressive the past three months. The trend-following Moving Average Convergence Divergence (MACD) has crossed below and above the zero line in recent months generating short-term sells and buys. Currently this indicator has turned down for a fresh take profits sell.
In this weekly bar chart of DISCA, below, we can see that prices are above the declining 40-week moving average line. The longer-term trend over the past three years is bearish. The weekly OBV line displays a very bullish pattern of higher highs and higher lows from November. On this longer time frame the OBV line suggests that there has been some very aggressive buying of shares the past six months.
In this Point and Figure chart of DISCA, below, we can see a recent decline to a new low - $22.34. A downside target of $21.20 is indicated, however, a rally to $24.92 would turn the chart bullish.
Bottom line: The charts and indicators of DISCA are mixed or confusing but that will not last forever. A rally above $25 will be bullish and a close below $21 would be bearish.