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January 29 Chart of the Day - Warner Bros

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Warner Bros. Discovery (WBD) is making headlines today as its stock fell 2.5% after Wells Fargo downgraded the stock citing a "risky earnings setup" to kick off the year...

Well off its $78.24 all time high (ATH) set back in 2021 the company's stock was trading at $10.25 earlier today.

That's such a dramatic drop we wanted to review the chart from a price action technical analysis perspective.

On the monthly time frame we can see that price tested a significant support level around the $9.07 level a little over a year ago before kissing a resistance level at $15.86 and fading back down.

This price action movement established a lower trend line that's tested and held once so far and is close to testing again.

Down on the weekly chart we can see that the $10 area is sort of a line in the sand for bulls to defend and hold.  

If this level fails price could test that monthly trend line again and if that were to fail then price could be headed down towards all time low levels with little resistance down there.

However, if price decides to pop back up from the $10 area then $11 - $12 area could be the next target up.

Ultimately, the bulls would need to see a break above and hold $16 to firmly create a pattern of higher highs and higher lows.

From this information, both traders and investors can formulate plans to fit their respective styles.

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.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

Take a look at the charts and let us know what you think.  

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