Viacom, Inc. operates as an entertainment content company in the United States and internationally. The company creates television programs, motion pictures, short-form content, applications, games, consumer products, social media, and other entertainment content. The Media Networks segment provides entertainment content and related branded products for consumers approximately through 250 locally programmed and operated TV channels, including Nickelodeon, Comedy Central, MTV, VH1, SPIKE, BET, CMT, TV Land, Nick at Nite, Nick Jr., Channel 5 (UK), Logo, Nicktoons, TeenNick, Paramount Channel, and others, as well as through online, mobile, and apps. The Filmed Entertainment segment produces, finances, acquires, and distributes motion pictures, television programming, and other entertainment content under the Paramount Pictures, Paramount Vantage, Paramount Classics, Paramount Animation, Insurge Pictures, Nickelodeon Movies, MTV Films, and Paramount Television brands.
Take a look at the 1-year chart of Viacom (NASDAQ: VIAB) below with my added notations:
Over the past 6 months, VIAB has hit the $46 resistance area (red) on 5 separate occasions. In addition, the stock has been climbing a trend line (TL) of support (green) since mid-February. Together, these two lines have formed an ascending triangle on VIAB. Eventually, the stock will have to break either the $46 resistance or the triangle support.
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The Tale of the Tape: VIAB is winding up between two key levels. A long trade could be made at the triangle support or on a break above $46. A break below the trendline would be an opportunity to enter a short trade.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach