An earlier post “A turn-around for TEN?”, April 28, commented on the appointment of Gina Rinehart to replace Hamish McLennan as CEO.
This is a chart analysis based on technical considerations only, and is not a suitable source of investment advice.
The long-term picture based on the weekly chart over the past 7 years
The picture is an unmitigated disaster for any share-holder unwise enough to stick with the company with the exception a period of just over 12 months from 13 March 2009 until 1 April 2010. In this year, the share-price lifted $1 from a low of 47 c to a high of $1.47.
The 7 year high was $2.77 on 2 Feb 2007. The share-price nadir came 2 Nov 2012, just six months ago, when the shares traded at 22 cents.
Currently the shares are just above this low at 30 cents, but still in a down-trend.
Trend change is apparent on the 18 month daily chart
In this chart the decline has been from 79 cents 15 Dec 2011, to 22 cents on the 29/11/12.
Since then an uptrend has emerged on the daily chart, with three higher highs. and two higher lows followed by an equal low.
This is encouraging for shareholders, but thus far since Gina Rinehart has taken the helm, the share-price has failed to form another higher high. On the other hand a lower low has not formed either; the share-price is confined to a narrow range between 30 and 32 cents.
Implications for the stock
The market would seem to be still pondering the future of Ten Network, and the ability of Gina Rinehart to turn around its fortunes.
A rise in the share-price above resistance at the last high of 40 cents would confirm an uptrend on the daily chart.
On the other hand a fall of the share-price below support at 28 cents could herald a further decline in the share-price.
I expect that Gina Rinehart will be a tougher negotiator than her predecessors, suggesting that the share-price is more likely to rise than fall. There is more potential to the upside than the downside, with strong support at 22 cents.
My targets for recovery are:
- 44 cents being the 38.2% fibonacci level, and
- 50 cents, the 50% retracement level
Ten Network is far from being “out of the woods” financially, but could be worth monitoring for return of market confidence.
- Network Ten wins rights to 2014 Olympics (news.smh.com.au)
- Ten ‘clears decks’ amid $243m loss (theage.com.au)
- Gina Rinehart wins royalties battle with Rio Tinto (telegraph.co.uk)
- Ten hires Fairfax’s Sarah Keith as head of research (mumbrella.com.au)
Categories: Chart Analyses, Technical Analysis, Trading opinion
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