Trade Ideas Newsletter 04/02/2016

DISCK is positioned for a contrarian breakdown

Based on the above analysis in DISCK, traders should verify that their portfolio can handle increased risk from an additional position. Also ensure that DISCK improves diversification in your current portfolio. Lastly, clever traders check how a new position matches up with not just their account, but the previaling market action as well. For example, take a look at the S&P 500. Is it moving to the upside or downside? Has it recently broken a key ceiling or floor? Be sure to line up your trading actions on DISCK with the trend in the overall market.

CHART

Right now the proprietary sentiment levels, calculated by Traders For Wealth, indicate an suprisingly positive bias toward DISCK. However, the price action in DISCK has been moving down contrary to the sentiment. This could be a strong sign of an impending contrarian breakdown. Traders should view this as a bearish position and make sure it is confirmed by overall market action, and in line with their current portfolio.

Discovery Communications Inc (DISCK)

Discovery Communications, Inc. (Discovery) is a media company. The Company provides content across multiple distribution platforms, including pay-TV, free-to-air and broadcast television, Websites, digital distribution arrangements and content licensing agreements. Discovery operates in three segments: U.S. Networks, consisting of domestic television networks and Websites; International Networks, consisting of international television networks and Websites, and Education and Other. The Companys U.S. Networks segment consists of national television networks. The U.S. Networks segment owns and operates 10 national television networks. The Companys International Networks segment consists of national and pan-regional television networks. The Companys Education and Other segment consists of curriculum-based product and service offerings, and production studios. The Companys subsidiaries include Discovery Holding Company (DHC) and Discovery Communications Holding, LLC (DCH).