Shares of mass media company Paramount Global ( PARA) are trading lower Thursday on the heels of a disappointing earnings report. Prices jumped 50% from their year-end low, but gravity is setting in again. Let's review the charts and indicators.
In this daily bar chart of PARA, below, I can see a small double-bottom in November/December before the recent recovery period. Prices rallied above the 50-day and the 200-day moving averages, but have slipped back to the 200-day line. Trading volume has increased since November showing more investor interest, but the On-Balance-Volume (OBV) line only shows a rise from late December. The Moving Average Convergence Divergence (MACD) oscillator is above the zero-line but could turn up or down from here.
In this weekly Japanese candlestick chart of PARA, below, I see a picture that I have trouble getting excited about. Prices suffered a big decline and prices have not made, in my opinion, a big enough base or zone of repair. PARA trades around the 40-week moving average line. The weekly OBV line shows a minor improvement in January. The MACD oscillator has improved but remains below the zero-line.
In this daily Point and Figure chart of PARA, below, I can see a potential downside price target in the $18 area.
In this weekly Point and Figure chart of PARA, below, I can see an upside price target in the $44 area.
Bottom line strategy: PARA is trading lower but it is also trading in the middle of its range now. A weak close Thursday could tip the scales to the downside and a strong close could suggest further gains ahead. Stay tuned.
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Another increasing concern for equities is that we are likely to see an 'earnings recession'.
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