PARA trade ideas
Hello Darkness My Old FriendI've come to talk with you again.
Because a vision softly creeping
Left its seeds while I was sleeping
and the vision that was planted in my brain
still remains
-------
Me and Viacom (now paramount) have history.
Apr 8th 2021 - It was the first stock I became invested in the markets 2 years ago (and lost 5 digits on)
Nov 12 2021 - I left this golden nugget of a game analogy for what was to come in markets.
Dec 11 2021 - The lessons I learned about the darkness of investing was eye opening.
Jan 8th 2022 - But it was too late. I had the Saturday Night Feature.
Jan 31 2022 - I learned to see the Risk as well as the Reward.
Jul 5 2022 - I could clearly the market was not the economy.
Thanks to those who encouraged me to keep posting ideas and learning econ and markets.
PARA is deeply undervaluedSince Archegos got margin called, Paramount shares have declined over 80% from ATH. PARA is now trading at a P/E below 4 and at roughly half its book value.
Paramount has been transitioning to streaming, and Paramount + has been rapidly gaining subscribers and revenue, but the main causes for concern have been its high debt, and the decline of its cable TV business. On the recent earnings report, PARA continued to show excellent growth in its revenues, but missed earnings due to increased operating expenses and restructuring expenses. With inflation making everything more expensive, increased expenses are unsurprising, and I view that the market has overreacted in selling PARA.
I am acquiring shares whenever the stock drops 2 standard deviation below the VWAP, and intend for this to be a long term play.
Staying AliveI don't know about you, but I got the Saturday Night Fever for VIAC.
Since Archegos made its fatal misstep, VIAC has been under short pressure from the Shylock.
Tax harvesting has relieved some of that pressure from shorts.
Add market sentiment shifting to risk off appetite,
We will likely see a retro stock like VIAC back in fashion this year.
I'm not saying the dance will rise to 100 again, but an ascending triangle breakout might see the 40-50 range again by the end of jan.
Big potential drop within next 6 monthsNASDAQ:NFLX has already dropped from ATH of 6xx $ to 17x$. Paramount looks next. On charts we see a technical head and shoulder (HS) in play. The breakdown has started. Wait for confirmation by retouch on the neckline of the HS pattern before shorting (green flag). Any confirmed close above the neckline voids the HS pattern and this analysis. Target is Covid low of around 12$
Champions League & Political AdsCBS has 2 things going for its streaming services
Loads of new accounts for Champions League football/soccer
PlutoTV is selling the hell out of political ads and they had over 25million users for Pluto last count.
Whether or not this is good for the stock overall we shall see
I don't do fundamental analysis really and don't pretend to but just want to put this out there as something to consider going into VIAC CBS earnings next week or so
PARA 3/10/22PARA
Perfect chart to see why you NEVER buy a parabolic move.
In Aug. ’20 price broke above the 200 ema and move sideways above it until Nov.’20 when broke out and up.
Price from here flagged all of Dec.’20 when it broke out of the flag jan.’21.
From there price made a parabolic move from 37.66 all the way up to 101.85 in Mar.’21
By Apr.’21 price crash all the way back down to 37.66.
Price found support at 37.66 and continued to move sideways under the 200 ema.
Price broke down from support Nov.’21 and fell all the way down to 28.12
Price pulled back and turned previous support of 37.66 into resistance. It has made several moves to this resistance level and rejected it.
Will enter trade short. Swing trade to 28.12
Entry: 32.67
Stop loss: 36.60
Target: 28.14- +13.87%, 1.25 RR ratio or will trade 10ema
Paramount HHThere is a new higher high but yet to be a higher low with continuation divergence.
there are more market risks than I like. Index's look ugly, tax season, it comes down to follow through price action at a historical inflection point. The white line must be broken and back tested as support to cause a change of character.
Under this market's selling pressure i think the probability is low or you could look at sideways movement until the money printer goes brr again.
Fundamental AnalysisI think that Paramount Global (former Viacomcbs) is one of the most hated stocks at this time,
Let's compare it to Netflix.
Revenue: PARA: 8B$ - NFLX: 7.7B$
Cash on hand: PARA: 6.3B$ - NFLX: 6B$
Long Term Debt: PARA: 17.7B$ - NFLX: 18B$
2 days ago PARA confirmed a 2B$ debt (due in 2024) redemption. That means they are going to save more than 90M$ per year (around 180M$ in total in 2 years)
Paramount subscribers increased by 9.3M - NFLX subscribers increased by 8.3M$
PARA business looks in a good expansion, NFLX expansion is decreasing.
So, why is NFLX, today market value around 10X PARA market value? It makes no sense, as most of this market.
Consider also that PARA has 3 types of business now. Linear TV (ads supported and free), ads supported streaming (cheaper), and no ads streaming (a bit more expensive) - NFLX has just the 100% no ads supported streaming
The ads supported TV can generate the money to support and push the streaming investments. This is something that Netflix cannot do.
So, at this time, PARA is a growth story with lower valuation parameters than Walmart or even Coke and Mc Donalds!
VIAC 1/6/2022VIAC - Went on a parabolic uptrend between Nov.2020 – March 2021. Price then came tumbling down finding support @ 37.65. Price also found resistance in 50ema. After much fight, buyers lost the battle and price broke down from support. Price has since pulled back to 50ema which has been acting as the dynamic resistance. This is my entry.
We also have a death cross signaling bear market.
Entry: 32.72
Stoploss: 35.09
Target: Trailing 50ema
$VIAC Handle PredictionIf a handle forms out of this cup, this is my guess to how it will form. This is not a definite just an assumption since the overbought signal is in play on the RSI I'm looking for the pullback as it sets up again. Earnings is also coming up in a few weeks and I'm thinking it will do well with the recent Comcast deal and the fact that the virus is giving people another reason to sit home and enjoy the tube! See the related post for more details.
NASDAQ:VIAC
$VIAC 🐂When this cup is finally finished playing out. The target for Viacom should be between $45-$47. Not sure where the handle comes in yet and I don't want to make any assumptions so we will wait on that. This is looking healthy despite the current market conditions in my opinion because with life being so hectic and the limit to outdoor activities... television may be some of our only fun for the next few months... again! Viacom also inked a multimillion dollar deal with Comcast to extended some of their channel services to the company including BET+.
NASDAQ:VIAC
Overbought on RSI, Look for Retest and Breakout to $40RSI Overbought on the 1D.
Should retest leading span B
Consolidate for another Breakout
Recapture $40 VPOC as leading spans A&B cross over to confirm bullish trend.
Macro analysis is looking good.
Keeping a tight stop if price falls back into cloud which will indicate failed breakout / volatility.
Checkout Ichimoku-Cloud edu series if you need help reading this indicator.
Not Financial Advice, My own trading journal.
