Vodafone share price has been incredibly resilient considering the troubles facing its Indian venture, Vodafone idea. This may be a good sign for investors.
Vodafone Group plc (LON: VOD) finished yesterday’s muted trading session at 119.28p, modestly lower by 0.10p (-0.08%).
Despite the ‘imminent collapse’ of its Indian operations last week, the UK telecoms giant was higher in four of the five trading sessions.
Shares of Vodafone Idea, the company’s joint venture, were hammered last week following the departure of the non-executive director and non-executive chairman Kumar Mangalam Birla. The cash-strapped company plunged 45% three days of heavy selling before mounting a recovery on Friday. However, the stock has turned lower in the last two days and appears set to return to last weeks low.
However, the Vodafone share price has so far shown no signs of wavering in its bid to clear 120p. This is undoubtedly a result of last months upbeat trading update which showed strong revenue growth in both the consumer and business divisions.
So what happens if VOD clears 120p?
The first thing of note on the daily chart is that Vodafone held the essential 112.90p support during July’s weakness. This set the stage for the rebound, which was added by the earnings report.
However, despite trading to 121.14p on the 23rd of July, the resistance has held firm on a closing basis.
Should the Vodafone share price finish the day above 120p, an extension to the 50-day moving at 121.89 is the first stop. However, the bulls will target the more important 200 DMA at 126.63p.
Although, if the price fails here, a test of the 112.90 support is possible. I would consider this a line in the sand for the price, and a close below 112.90 could result in a much steeper decline.
Investors should therefore stay abreast of the news flow concerning Vodafone Idea. However, Vodafone Group plc seems oblivious to the troubles and instead focusing on the positive earnings.
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