MSGE trade ideas
June Gainers (MSGE, account up 2.05%)1st trade in June is NYSE:MSGE .
Holding period is 0 day.
Account is up 2.05%.
Total return in June is 2.05%.
Buy signal on weekly chart for $MSGEMadison Square Gardens Entertainment has upcoming earnings on August 19th. With the data provided by AXP travel & entertainment spending are up as spending has shifted from goods to experiences, entertainment, and services. This is exemplified in what retailers are reporting. And I think this will be positive for MSGE.
Currently, the middle and upper classes are doing fairly well while the lower class is suffering from the regressive tax of inflation, which is unfortunate. Those with disposable income and better economic situations are more likely to be MSGE customers boding for a good quarter and less risk from demand destruction.
MSGE is trading above its 52-week lows at 0.5629 its book value, providing tremendous value and a good risk-reward ratio. Its EBITDA and EBIT have gone from negative previously to positive in the past two quarters. Gross profit has turned positive for the past 4 quarters and net income has been improving over the past 3 quarters.
Anytime the K% crosses the D% on the Stoch RSI around the level of 1.73, MSGE goes for a decent rally. If you average the two past rallies (MSGE has a short trading history) from the week the bullish Stoch RSI cross happened to a relative peak, it's a 59.47% move that could be implied over the next 6-12 months. It has significant resistance at the $68.06 level.
It recently broke out through a downtrend line that started in mid-April. It is still in a downtrend, but it seems the prudent thing to do would be to create 1/3 to 1/4 of a full position in the stock now and buy the next tranche upon a higher low or higher high. I have a price target of $81 on it by the end of the year. That's roughly 40% upside from here. The highest PT on the street for MSGE is $100, the lowest is $63, and the average is $82.83.
$MSGE earnings before the bellThe last two earnings reports were disappointments on earnings but surprises on revenue. On earnings from when they report before the bell, the stock usually moves +/-14.5% from the opening bell to the next day based on the most recent earnings reports which I think are the most relevant.
Live concerts and events are back. People are eager to spend so merchandise and food and beverage revenue should be a surprise on the upside. Anecdotally, I have heard that live shows are selling out almost immediately and that most performers are back on the road; signifying the overall entertainment industry is coming back.
I think they will surprise on revenue and earnings. I realize Omicron slowed the global economy down, but MSGE mainly operates in the US which was not as deeply affected by Omicron in comparison to some of the places with zero-tolerance or stricter rules. People were still going out. Sporting events and concerts were packed.
Earnings Estimate: $1.18 EPS
Revenue Estimate: $538.975 million
MSGE/PEJ (a proxy for the entertainment industry) shows that weekly the underperformance seems to be reversing trend and MSGE is beginning to outperform
Rounding bottom in MSGE/PEJ
MACD cross/curl
$MSGE positive RSI divergence on the weeklyDouble bottom formation along with a positive divergence in RSI make MSGE look like a prime buy into the New Year. 20-week MA beginning to curl up. Go long MSGE. There's been a lot of volatility in this stock since it's heavily correlated to reopening, but that headwind could be on the verge of turning into a tailwind.
Omicron peaked very rapidly in other countries so we should expect the same here. And we may be reaching the peak right now. A huge spike in Omicron cases was recorded over the holiday weekend in the USA, which could signal the end to this pandemic, when covid finally becomes endemic.
I was definitely a little early on this but I have had a good amount of success trading options in this stock so it is one of my favorites to trade and now I think it is the proper time to initiate a long position. It should easily reach its prior highs, breakthrough and head towards the $150's as life gets back to normal and live events roar back.
This is not a recommendation, just an opinion, please do your own D.D.
time to go long $MSGEThe 50-day moving average appears to be curving upwards finally and volume has been declining so there aren't many sellers left. Time for the buyers to take control. I think the stock will pop on earnings and begin an uptrend after earnings are announced. Which will show that the live entertainment business is back in full swing and improving by the day.
The floor is at $60.26
Resistance will be significant at target levels and at the VWAP from the 52-week high.
Free cash flow was up 30% in the last quarter. I think this stock goes to $150 easily.
MSGE: Bullish pennantBullish Pennant
Pros:
Descending volume during formation
PPS above 50MA
R/R ratio above 7
250RSI Not available
200MA Not Available
RS above 0, and ascending
ATR ascending
Cons:
Low data count, new ticker.
If confirmed:
PT = 134.45$
MSGE over 81.54Swing pick. S/L 81.54. For MSG's storied history this was a recent IPO in May of this year. Within 7 trading days it plunged violently from 99 to 58 per share or about 41%. It should move on any reopening or vaccine news. I have found wedge patterns like these have a high probability of success leading to a big move in a strong market (See Z for history). Recent price action found resistance at 81.54 so over is confirmation for continued upside. S/L 81.54.
