ITV Share Price Ripe for a Bullish Breakout as Ad Business Recovers

Summary:

The ITV share price seems to be ripe for a bullish breakout as the advertising business recovers. We also explain why the triangle could be beneficial

The ITV share price is tilting upwards after the company signaled that the advertising market was bouncing back. The shares are trading at 125.35p, bringing its year-to-date performance to more than 20%. The stock has jumped by more than 130% from its lowest level in August last year.

What happened: The ITV stock price has been in a recovery mode as traders price in the return of the advertising industry in the UK. They are right. In a report today, the company said that its advertising sales jumped by 68% in April compared with the same period last year.

Still, this performance is skewed since many companies were pausing their marketing in April 2020. It also said that it expects its sales will continue doing well in the next few months. It sees sales rising by 85% and 90% in May and June. The firm’s revenue rose to more than 709 million pounds in the first quarter.

Why it matters: The UK economy has been in a recovery mode recently as the government ramps up its vaccination efforts. A faster recovery could see many companies upping their marketing budgets, which will be a positive thing for ITV and other advertising companies.

ITV share price forecast

The daily chart shows that the ITV stock price has been rising in the past few months. The shares have found a strong resistance at the year-to-date high of 128.40p. In fact, the stock struggled moving above this resistance today. A closer look also shows that it has formed an ascending triangle pattern, which is usually a bullish sign. The uptrend is also being supported by the 25-day and 50-day EMAs.

Therefore, since an ascending triangle is usually a bullish signal, we can’t rule out a major bullish breakout. But for this to happen, bulls will need to cross the resistance at 128.40p. However, a move below 117p will invalidate this trend. This price is along the ascending trendline.

Please don’t consider this investment advice. Views expressed here are those of the writer and the writer and InvestingCube will not be held liable for any losses.