BT Share Price Attempts Recovery After Breaking Key Support. But Will It Hold?

Summary:
• BT share price has been on a decline since mid-September and broke below a key support last week. I foresee a struggle to the upside.

BT share price edged up on Monday’s early Morning London Session, trading at GBX 144.80 after erasing 0.2 percent of its value. The UK telecommunications giant is striving to return to the GBX 145 support mark to potentially build momentum to the upside after a prolonged decline since mid-September.

BT Group (LSE: BT.A) rose by 1.4 percent on Friday to interrupt a four-session decline that has seen it break below the 20-EMA level of GBX 145.30 on the daily chart. The company’s fundamentals are not so strong as to prevent extended decline below that mark, but the bulls will likely fight back to return to that support.

BT’s debt burden is still formidable. In fact, it has grown by 3.1 percent this financial year to £19.5 billion from the previous year’s figure of £18.6 billion. Surprisingly, however, BT has stuck to its tradition of issuing dividends, and that might concern some investors. With a market capitalisation of £14.35 billion, the debt weight will continue to drag BT in the mid-term.

That said, the company announced in May this year that its capital expenditure on full fibre broadband rollout had already peaked. Therefore, this could reduce costs significantly and help ease the debt burden. The program has cost the company billions of pounds and reduced its margins significantly.

Despite its not-so-impressive debt figures, the BT share price has performed well this year, and are up by 16 percent year-to-date. In comparison, rival telecoms company Vodafone’s share price has gained 7 percent. In addition, BT’s Price-to-Sales ratio of 0.68 compares favourably with Vodafone’s 0.63.

BT share price today

BT share price pivots at 144.25, and MACD indicator signals that the buyers will likely stay in control if the momentum keeps the price break above that mark. The bullish momentum will likely meet initial resistance at 145.00. However, a stronger bullish push could break above that level to potentially test 145.95.

On the other hand, moving below 144.25 could see the establishment of the first support at 143.65, but extended bearish control could break below that level to test 143.80. At that point, the upside narrative will be invalid, and the resulting momentum could extend the decline to test 143.00.