The entertainment industry was not immune to the gyrations of the general stock indexes at the start of 2016. Most of the industry titans registered losses. With the S&P 500 still seeking to find its footing, the winner is … Twenty-First Century Fox (FOXA.O), which has eked out a gain so far this year.
Source: Thomson Reuters Eikon
The envelope, please
The entertainment companies have been hit hard by the vagaries of the industry and by the economic slowdown. Lions Gate is down over 35% and Sony lost more than 20% YTD. DreamWorks Animation managed to reduce significant losses.
How do they compare to the S&P 500?
Source: Thomson Reuters Eikon
Ready for a closeup
In general, the portfolio of Twenty-First Century Fox, Sony, Lions Gate, DreamWorks Animation, NBC, Viacom, AMC, and Disney, which I named “Oscars 2016,” has a high positive correlation with the S&P 500. Conceivably, a recovery in the index would bode well for most of the portfolio components. Keep an eye on the Oscar ceremony to see whether the winners can improve the fortunes of their movie houses.
Since Twenty-First Century Fox’s stock is barely above zero, let’s analyze its standing.
Source: Thomson Reuters Eikon
In the spotlight
The stock stopped twice just above the 50% retracement of its uptrend in the first part of the century. It recently broke above its 21-day exponential moving average and this encourages long positions. In the short term, this average and the 38.2% Fibonacci retracement at 26.08 will support. But it will take a close above 31.12 to signal a more sustained recovery.
Only a close below the 50% retracement at 22.00 would spell trouble for Twenty-First Century Fox’s stock.
Meantime, enjoy the Oscars!
