December 16 Chart of the Day - Warner Bros
Highly precise price action technical analysis offers the strongest trading edges and the most opportunities across the markets, making it the foundation of our reviews.
Warner Bros. Discovery (WBD), home to HBO, Warner Bros. Studios, DC, Max, CNN, and a massive global entertainment footprint, has suddenly become the center of a good old fashioned bidding war as Netflix and Paramount reportedly circle the company.
After trading near historic lows earlier this year, price has exploded higher in a powerful short-term reversal.
Traders are now watching closely to see how far this momentum can extend as WBD approaches key Fibonacci levels and major structural resistance zones.
We'll review the chart from a price action perspective to identify potential levels of interest in both directions.
The charts highlight key levels where investors and traders alike will be watching closely.
Consistent profitable investing and/or trading requires a structured, rules-based approach to price action analysis. Proven processes, disciplined risk-reward management, and precise execution create the foundation for long-term success.
When combined with powerful mental performance strategies, this method becomes the ultimate blueprint for thriving in any market, on any time frame.
As requested, this analysis will take a price action technical analysis approach to assess key levels and potential next price moves for this chart.
Since May 2023, we've showcased over 675+ Charts of the Day and provide a Free Quick Start Guide to traders with ambitious income goals for our patent-pending NeuroTrading Method®
Monthly Chart
The monthly chart highlights the extraordinary volatility WBD experienced during the past several years, including the massive spike to $78.14 before collapsing into the single digits.
The recovery now underway has pushed price into a major Fibonacci structure defined by the long-term swing from the $78.14 high down to the $5.12 low.
Key levels overhead include:
- Initial monthly resistance at $28.98, which price is already testing
- 50 percent retracement at $42.54
- 61.8 percent retracement at $50.94
Momentum has turned sharply to the upside, but the monthly remains a chart dominated by large retracement levels and wide air pockets from prior selling.
A breakout above $28.98 opens the path toward $31.08 and then the more substantial mid-range targets at $34.89 and $42.54.
With plenty of volatility traders have had much to be happy with and long term buy and hold investors have been greatly disappointed.
This kind of movement highlights why a cautious and well-informed approach is essential when evaluating a stock’s short to mid term outlook.
Weekly Chart
The weekly chart provides the most important insight on this setup because it showcases the long gray rectangle change control zone that dominated WBD’s price behavior for multiple years.
Change control zones are one of the five price action tools we teach when charting anything. By definition, they are areas where neither buyers nor sellers are in control. Price can slash through them with force, respect the top or bottom from inside or outside, or drift sideways within them. When price finally breaks away from the zone, it often gets pulled back to it like a magnet.
WBD demonstrated all of these behaviors in this gray zone — chaotic swings, false breaks, clean rejections, sideways drift, and sharp returns back into the range.
Now price is pushing up from the lower boundary of that zone toward the key Fibonacci levels.
Price has already sliced through several of the local fib levels with force, showing strong short-term momentum.
The next major resistance is $31.08 from the weekly structure. A breakout there opens the path higher toward the deeper retracement targets and potentially a larger trend reversal.
It goes without saying though, the only guarantee in the markets is that price cycles. It cycles up and it cycles down across all time frames and all charts and rarely, if ever, moves in a straight line.
Only time will tell for sure what price will do next...
We’ve combined Fibonacci levels with key support/resistance zones and trend analysis to pinpoint potential price levels of interest and future targets.
With precision-focused charts like these, both traders and investors can confidently build and execute their strategies.
So what's next?
We don't make predictions...
Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.
- Support/Resistance
- Trend
- Fibonacci
- Supply/Demand Zones
- Change Control Zones
ChartPros provides the exact methodology in its price action technical analysis courses to create charts like this with the most precise and accurate levels from which investors and traders can formulate their respective trade plans.
Take a look at the charts and let us know what you think. We'd like to hear from you in the comments sections.
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