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Sky Auction Bid Halts Comcast Stock Uptrend

CMCSA is back in the red on a year-over-yead basis

Managing Editor
Sep 24, 2018 at 9:37 AM
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Shares of Comcast Corporation (NASDAQ:CMCSA) are lower in early trading, as traders react to the company's winning $40 billion bid for European sector peer Sky Plc. This comes just months after the television concern lost a bidding war to rival Disney (DIS) to buy a large portion of Fox (FOXA) assets.

While the purchase sent shares of Sky soaring in U.K. markets, Comcast stock was last seen 4.9% lower at $36.05. Looking broader, CMCSA had been climbing higher since its mid-May bottom of $30.43, helped by support from the rising 30-day moving average, which acted as a ceiling of resistance for the shares until early June. Regardless, Comcast stock remains well below its January peak of $44.

Looking into analyst sentiment, a large majority of covering firms were optimistic toward Comcast stock heading into today. Twelve of 15 brokerages sport "buy" or "strong buy" recommendations, leaving a mere three with a "hold" rating. Plus, CMCSA's average 12-month price target of $43.32 stands at a notable premium to current levels. 

Lastly, now seems to be an attractive time for near-term traders to jump onto Comcast stock with options. This is per the broadcasting firm's Schaeffer's Volatility Index (SVI) of 23%, which ranks in the 15th percentile of its annual range. In other words, near-term options are still pricing in relatively low volatility expectations.

 

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