Vodafone - a look at the weekly chart

Last week Vodafone reported to the market what looked like a downbeat statement which had little or no effect on the share price. If anything, the share price is simply in line with current market sentiment with a bounce in the trend from the falls towards the end of last year. Not sure there is any conviction in this from the fundamental side, there still seems to be quite a lot of negative news. There is also the news that Invesco's Neil Woodford sold his holdings in the company.

Mitchell Fraser-Jones, a director of Invesco Perpetual, confirmed: “In terms of trading activity, the fund has now completed the sale of its holding in Vodafone.

“The company has reduced its forecasts for revenue growth on the back of ongoing weakness in its core southern European markets and the cash flow cover of the dividend has fallen to what we view as uncomfortably low levels.

“The company announced a share buy-back rather than the hoped for special dividend with its dividend from Verizon Wireless, while we also have reservations about the company’s ability to maintain its margin on data revenues.”

http://blogs.telegraph.co.uk/finance/ianmcowie/100022718/investment-guru-neil-woodford-sells-vodafone-despite-good-results/

The big thing that Vodafone has going for it right now is its share of Verizon Wireless, hedge fund manager David Einhorn recently went bullish on the company because he believes that market is ignoring the value this holding has.

He works for Greenlight Capital and is widely followed on Wall Street.

So when he said in a newsletter to investors that the market undervalues Vodafone’s ‘clearly quite valuable’ 45 per cent stake in Verizon Wireless, and that it could soon sell its shareholding, buyers chased shares of the world’s second biggest telecoms company up to 168.65p before they closed 5.2p better at 168.675p on turnover of £233million.

Einhorn added further spice by suggesting that ‘given the huge valuation disparity between what the market thinks Verizon Wireless is worth to Verizon – at least a couple of hundred billion dollars – and what it ascribes to Vodafone – about zero – combined with Verizon’s increasing dependence on Verizon Wireless, it wouldn’t be a surprise if Verizon decided to buy all of Vodafone to gain full ownership of Verizon Wireless’.

http://www.thisismoney.co.uk/money/markets/article-2267840/MARKET-REPORT-Einhorn-sparks-Vodafone-buzz.html

Charts:


As for the chart, sentiment is positive with this bounce, but it still might be of the dead cat variety. Still, one wonders of the low at about 158 is now in or whether it will be tested again over the next few weeks.

Vodafone - Weekly

Previous charts; http://sevenpillarstrading.blogspot.co.uk/2012/12/no-christmas-love-for-vodafone.html