Is Liberty Latin America Setting Up for a Big Move?

NASDAQ: LILAK | Liberty Latin America Ltd.  News, Ratings, and Charts

LILAK – Liberty Latin America Ltd (LILAK) has rallied up into a rectangle consolidation pattern over the past several months, where it has formed a resistance level and support line. If the stock breaks through either level, a big move is expected. Read more to learn how to profit from this trade.

Liberty Latin America Ltd (LILAK) is a telecommunications company. It is a provider of video, broadband internet, fixed-line telephony and mobile services to residential and business customers. The company’s reportable segments include C&W Caribbean and Networks, C&W Panama, VTR/Cableticaand Liberty Puerto Rico.

The company just reported its results for the second quarter, where it saw strong subscriber growth in its Caribbean and Puerto Rico segments. LILAK also reported its best ever quarter for the mobile segment with 118,000 subscriber additions, compared to losses in the prior year due to COVID-19.

The company has a current ratio of 1.5 which indicates it has more than enough liquidity to handle short-term obligations. In terms of growth, the company is expected to grow earnings 110.3% this year, while sales are expected to rise 27.2%.

The stock appears a tad overvalued with a forward P/E of 23.09 and has shown mixed performance since March, as evident in the chart below.

Take a look at the 1-year chart of LILAK below with added notations:

Chart of LILAK provided by TradingView

LILAK has rallied up into a rectangle consolidation pattern over the past several months. The stock’s pattern resistance is at $15 (red), and the level of support is at $13 (green).  LILAK jumped towards the top of the pattern yesterday.

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At some point, the stock will have to either break the resistance or the support. The possible long position on the stock is on a breakout above $15. The ideal short opportunity would be on a break below $13.

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@cmtstockcoach


LILAK shares were trading at $14.50 per share on Friday morning, down $0.03 (-0.21%). Year-to-date, LILAK has gained 30.75%, versus a 19.23% rise in the benchmark S&P 500 index during the same period.


About the Author: Christian Tharp


I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing. More...


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