Extra! Extra! Read All About It
- Posted by Greg Harmon
- on July 5th, 2012
Newspaper stocks are all the rage. With Rupert Murdoch deciding to break News Corp, $NWS, into two companies the others have benefited. Does this make sense? Take a look at two, New York Times, $NYT and Gannett, $GCI.
Gannett, $GCI, had been moving higher out of a base and then failing resistance at 13.80 when the News Corp announcement came. Since then it had a 9% run higher before the recent topping candles. The Hanging Man Monday confirmed lower Tuesday and then another Hanging Man Thursday all suggest it is time to consolidate or pull back. The Relative Strength Index (RSI) touching over the technically overbought area and then fading, a Moving Average Convergence Divergence indicator (MACD) that is fading, and declining volume all concur.
New York Times, $NYT
New York Times, $NYT, was in a similar situation at resistance at 7.05 after moving out of a base. It moved almost 20% with a similar topping pattern. This one shows a Spinning top, followed by 2 Hanging Man Candles , all confirmed lower Thursday. The RSI and MACD are rolling over as well on lighter volume.
Both of these stocks may be in the midst of a resurgence, and can be interpreted as building bull flags in consolidation before a move higher. But on the chance that the catalyst for the move was the News Corp announcement their price levels do not make sense. They do not have media divisions. Take a look at the News Corp chart below. The last 8 days have been identical between the 3 charts. If I owned NY Times or Gannett, I would be protecting or taking some profits.
News Corp, $NWS
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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