Do you love soccer, or are you a fan of Manchester United? Then probably, you consider investing in stocks of listed clubs. Manchester United plc (NYSE:MANU) is one of those equities available for trading on stock markets. But how are you conversant with this stock’s price movement?
Well, stocks of sporting organisations are heavily impacted by developments surrounding clubs. The MANU stock has particularly been boosted by reports of a potential takeover. The latest to be speculated to consider bids for the iconic club was Apple, with a price tag of up to $7 billion or £5.73 billion being considered. These speculations are expected, considering that Manchester United has already confirmed to explore strategic alternatives. A potential sale is one of the strategic moves considered.
With rumours of new ownership, MANU has soared by 67% in the past one month. At the time of publication, MANU was trading at $22, its highest since November 2018. The stock has hit a resistance, even as the company’s quarterly earnings come on December 08 after the market close. The expected EPS for the quarter is a loss of $0.12, worse than a loss of $0.11 per share in the prior year. It may, however, not matter about the results, as the acquisition developments could remain the focal point. Investors may have overbought the stock, and a correction is imminent.
MANU hits resistance amid overbought conditions
MANU Chart by TradingView
MANU is correcting after meeting resistance at $23. The resistance coincides with extremely overbought conditions, with an RSI reading of 83. In the short term, the stock could correct to $20, which could accelerate on disappointing earnings and/or outlook.
MANU stock, what should you do?
This article finds investing in MANU unrealistic considering the high stock valuation. Further developments around the club’s acquisition could boost the stock, but we desist from recommending a buy now. Buying at a lower price offers a better risk and reward ratio.
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