Recent trading action in Warner Bros Discovery (WBD) shares suggests that investors may be starting to look past all of the merger integration issues that have dominated the headlines and depressed the stock on both an absolute and relative basis through 2022. WBD joined the SIA NASDAQ 100 Index Report in December and this month it has shot up the rankings moving from deep in the red zone to the Green Favored Zone. Yesterday, WBD finished in 22nd spot, up 77 places in the last month.
A year of distribution in Warner Bros Discovery shares appears to have finally ended in a high volume shakeout below $10.00 back in December (circled). After that, the shares stabilized and have since started to recover. In recent weeks, the shares have snapped out of a long-term downtrend, completed a bullish Falling Wedge pattern, regained $10.00 and $15.00, retaken their 50-day moving average and more recently, regained their 200-day moving average, all signs of renewed accumulation.
Previous bear market peaks suggest potential resistance may emerge along the way near $17.65, $18.75, or the $20.00 round number. Initial support appears at the 200-day average near $13.95.
A new recovery trend appears to be getting underway in Warner Bros Discovery (WBD) shares. A long-term downtrend in WBD which started back in April of 2021 appears to have finally bottomed out in a washout below $10.00 back in December. Since the start of this year, the shares have rebounded from near $9.00 toward $15.00, completing bullish Double Top, Spread Double Top and Spread Triple Tops on their way to building a bullish High Pole.
Potential resistance tests for the current upswing appear at previous column lows near $16.70, $18.65, $19.40 and $21.40, along with the $20.00 round number. Initial support appears near $13.85 based on a 3-box reversal.
With a bullish SMAX score of 8, WBD is exhibiting strength against the asset classes.
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