FTSE 100
The BT share price pulled back after the stock staged a major bullish rally recently. The stock declined to 196p, which is about 5.5% below the highest level this week. Still, the shares are about 105% above the lowest level in 2020.
What happened: BT made headlines in June. First, it was reported that Patrick Drahi had acquired millions of shares making him the biggest shareholder in the company. This was a validation for the company’s business strategy.
Second, we reported that Rupert Murdoch’s News UK was considering bidding for the company’s sports television franchise. News UK confirmed that the discussions were in early stages. Third, the company recently said that it was holding talks with OneWeb as it seeks to expand its rural broadband solutions.
Looking ahead, this month, investors will be focusing in the company’s Q1 results that will come out on July 29. The results come a few months after it reported strong quarterly results. They showed that the company’s broadband revenue continued doing well as its revenue fell by just 7% to 21.3 billion pounds. So, what next for the BT share price?
The daily chart shows that the BT share price has been in a strong bullish trend recently. The stock has moved above the 25-day and 50-day exponential moving averages (EMA). It has retreated as it approached the important resistance at 209p. A closer look at the chart shows that it has formed an Elliot wave pattern.
As such, the current decline is mostly because it has completed the third phase of the pattern. As such, there is a likelihood that the shares will drop modestly and then resume the bullish trend. This prediction will be invalidated if it moves below the 38.2% Fibonacci retracement level at 165p. Such a drop will invalidate the Elliot wave pattern.
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