BT share price remained on edge today, Nov. 5, as investors waited for the upcoming financial results, which will provide more information about its performance and the ongoing turnaround efforts. The stock was trading at 180p, down by 17% from its highest level this year.
BT share price could form a risky pattern
The daily timeframe chart shows that the BTZ stock price has been in a strong downward trend after peaking at 217p in August this year.
It is now attempting to move below the important support level at 179p, the lowest level on October 17 this year. The stock has also dropped below the weak, stop and reverse point of the Murrey Math Lines tool.
Most notably, the stock is now about to form the risky death cross pattern, which happens when the 50-day and 200-day Exponential Moving Averages (EMA) cross each other.
The stock has moved below the Ichimoku cloud and the Supertrend indicators, a sign that bears are in control for now.
Therefore, the most likely scenario is where the stock continues falling as sellers target the ultimate support of the Murrey Math Lines at 175p. A move below that support will point to more downside, potentially to the extreme oversold level at 162p.
On the flip side, a move above the strong, pivot, reverse level at 187.5p will invalidate the bearish BT share price forecast and point to more downside.
BT share price chart | Source: TradingView
BT Group earnings ahead
The next important catalyst for the BT share price will be the upcoming financial results, which will come out on Thursday.
These numbers will provide more color on whether the company’s business is growing. The most recent consensus numbers show that the average estimate is that the group revenue dropped by 2.2% in the second quarter to £4.9 billion.
The slowdown will likely be spread across all businesses, but will be more pronounced on the business segment that has been under pressure in the past few years.
Consumer revenue is expected to come in at £2.4 billion, while its business and OpenReach will bring in about £1.8 billion and £1.5 billion, respectively.
Analysts expect that BT Group’s annual revenue will be £19.9 billion, followed by £19.86 billion and £19.87 billion in the following two years, meaning that they see its growth stalling.
On the other hand, the expectation is that its cost-cutting and the reduction in OpenReach investments will likely boost its profitability a bit. The expected EBITDA will come in at £2 billion in the second quarter, followed by £8.22 billion this year and £8.25 and £8.29 billion, respectively.
The results come as the company has done several actions to boost its performance. For example, the company is now exploring a low-cost mobile plan to fend off competition from companies like Monzo and Revolut.
Moving to this segment will see it compete with other companies known as mobile virtual network operators (MVNO) like Lebara and Lyca Mobile that lease unused capacity and package it for monthly contracts.
The MVNA business can be highly profitable for BT Group if it can scale it up since these companies pay between £3 and £5 and then sell their subscriptions for about £10 a month.
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