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- 1 Warner Bros. discovery stock price closed at $11.56 with a loss of -12.02% during the last intraday trading session.
- 2 WBD stock price has melted below 20, 50, 100, and 200-day exponential moving averages.
- 3 The year-to-date return of Warner Bros. Discovery is 19.79% while the six-month return is -26.13%.
Warner Bros Discovery (WBD) stock was in an uptrend since the start of June, rising from the low of $11 and retesting the $14.60 level. The stock price faced strong rejection from $14.60 which induced negative sentiment in the market and WBD stock price broke the trend line.
There was a retest of the trend line after the formation of the support level at $12.20. The previous candle successfully broke the recent support of $12.20 and closed below it.
If the next candle can break the low of the previous candle, it might melt down toward the support level of $11. On the other hand, if bulls enter into the market and form a support, the price might retest the $12.20 level.
Reason Behind Drastic Fall Of Warner Bros Stock Price
The two major United States entertainment companies – Fox Entertainment (NASDAQ: FOX) and Warner Bros Discovery (NASDAQ: WBD) were dragged down on Friday due to the dispute between media giant Disney and cable provider Charter Communication over the television distribution fees.
Disney and Charter Communication failed to secure a distribution agreement which led to Disney blocking its cable channels, including ESPN and ABC, from being telecasted on Charter’s spectrum network.
This signaled a souring environment in the video entertainment industry. As a result, Warner Bros Discovery, which generates most of its profit from cable channels like CNN, TBS, TNT, and HBO finished 12% down.
The news came as the entertainment providers were already struggling with Hollywood writers and performers strike with slowing growth and a lack of profits in streaming. Charter Communications wanted to offer an ad-supported version of Disney’s streaming services, but Disney refused.
Will WBD Stock Price Fall Below $11?
The stock price has melted below 20, 50, 100, and 200-day exponential moving averages, indicating bearish momentum.
Chaikin money flow score has dropped from 0.23 to -0.10 in two days, suggesting weakness and capital outflow in the market. The relative strength index stands at 34.55, nearing the oversold zone, indicating strong bearish momentum.
WBD stock price faced strong rejection from the 20-day SMA and has dropped below the lower band of Bollinger bands, indicating the possibility of a short-term pullback.
Conclusion
The market structure and price action are strongly bearish due to the dispute between Disney and Charter Communication. Entertainment providers were already struggling with the strike of Hollywood writers and performers.
Technical parameters also favor the selling side. While the company has some valuable intellectual property, it will at least need the Hollywood strike to end before it can mount a comeback.
Technical levels
Major support: $11 and $8.85
Major resistance: $13.20 and $14.60
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Saurav Bhattacharjee is in charge of the Broadcast development team of The Coin Republic.
He has been covering the Metaverse and NFT niche for the past 2 years.
With stellar interviews on his portfolio like Nicehash, Paxful, WallstreetWolvesNFT, Bitholla, Totemfi, EOS.io etc. Saurav has spearheaded the NFT SUPERSTARS AWARD and successfully hosted the first award in 2021.
