DISH Network Corporation (DISH) shares moved higher during pre-market hours on Monday after the company reported better-than-expected fourth quarter financial results, although the stock gave up those gains after the markets opened.
- DISH Networks moved higher during pre-market hours after reporting a 41% increase in revenue and earnings that beat consensus estimates.
- The company's better-than-expected performance comes as it gears up to become a fourth major wireless carrier in the United States.
- The stock has more room to run on a technical level, although it moved off of its pre-market highs after the open.
The company reported revenue that rose 40.7% to $4.56 billion, beating consensus estimates by $10 million, along with earnings per share (EPS) of $1.24, beating estimates by 49 cents. Net pay-TV subscribers fell by 133,000, which was worse than the 76,000 loss that analysts expected but better than the 194,000 loss during the same quarter last year.
While the company has been historically focused on pay-TV, recent efforts have been focused on becoming the nation's fourth major wireless carrier. DISH acquired Boost Mobile from Sprint as part of T-Mobile US, Inc.'s (TMUS) Sprint acquisition last year and could partner with Amazon.com, Inc. (AMZN) in the United States to bring in the capital necessary to build out the network.
From a technical standpoint, the stock broke out from a descending triangle pattern last week before consolidating on Friday. The relative strength index (RSI) remains in neutral territory with a reading of 61.50, while the moving average convergence divergence (MACD) continues to trend higher. These indicators suggest that the stock could have room to run.
A descending triangle is a bearish chart pattern used in technical analysis that is created by drawing one trendline that connects a series of lower highs and a second horizontal trendline that connects a series of lows. Oftentimes, traders watch for a move below the lower support trendline because it suggests that the downward momentum is building and a breakdown is imminent.
Traders should watch for consolidation above trendline and moving average support levels at around $31.50. If the stock breaks down, traders could see a move to trendline support at around $30.00. If the stock rebounds higher, traders should look for it to retest reaction highs of around $37.00 over the intermediate term.
The Bottom Line
DISH Network shares moved higher during pre-market hours on Monday before falling at the open. After the stock broke out from a descending triangle last week, traders should watch for consolidation and a move higher over the intermediate term.
The author holds no position in the stock(s) mentioned except through passively managed index funds.