Saturday, June 19

Live Nation Entertainment Is Not Yet Ready for Prime Time


During Friday’s “Mad Money” program, a caller asked host Jim Cramer about Live Nation Entertainment Inc. (LYV) .

“This has run up a lot but this company is the real deal when it comes to events,” responded Cramer. 

Let’s check out the charts. 

 

In this daily bar chart of LYV, below, we can see that prices have tripled in the past 12 months. LYV is trading above the rising 50-day moving average line and above the bullish 200-day moving average line. The trading volume is “different” with declining volume from March to October and then has been flattish from November. The On-Balance-Volume (OBV) line shows a very modest rise from November when prices started a more impressive uptrend with a price gap. With the volume pattern and the OBV line not really keeping up with price gains, I am questioning the health of the uptrend.

 

The Moving Average Convergence Divergence (MACD) oscillator is currently pointed down toward the zero-line and a potential sell signal. 

 

  

 

In this weekly Japanese candlestick chart of LYV, below, we can see a weakening picture. Notice the two upper shadows in late February as traders rejected those highs? Prices are still above the rising 40-week moving average line, but the weekly OBV line shows a new “down tick.” The MACD oscillator is narrowing and could soon cross to the downside for a take-profits sell signal. 

 

 

In this daily Point and Figure chart of LYV, below, we can see a potential downside price target around $79.  

 

 

In this weekly Point and Figure chart of LYV, below, we see that the software is projecting the $150 area as a tentative longer-term price objective. 

 

 

Bottom line strategy: The Point and Figure chart of LYV (above) suggests a decline to the $79 area, but the $75-$65 area is probably better chart support and that could be tested in the weeks ahead. Let’s wait for the correction to unfold and good support to develop before entering the long side. 

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