A descending triangle has emerged in the chart of Maxar Technologies Inc. (MAXR). This is a bearish pattern and if the support level is broken, a breakdown could occur.
MAXR is an integrated space and geospatial intelligence company with a full range of space technology solutions for commercial and government customers including satellites, Earth imagery, geospatial data, and analytics.
The company is seeing strong demand from customers that rely on its products for national security and commercial missions. Going forward, it should leverage its satellite imagery capabilities to provide imagery data for Internet of Things (IoT) devices.
As of the end of the year, MAXR only had $27 million in cash. While short-term debt was only $8 million, its current liabilities are higher than its current assets, which is concerning. Though the company is highly profitable with a net margin of 17.6%.
In its most recent filing, earnings were up year over year, but still negative. Revenue fell 9%. For the current quarter, revenue is expected to rise 13%. The stock is also quite overvalued with a trailing P/E of 42.72 and a forward P/E of 526.32.
The stock has been trending upward over the past year, but has shown mixed momentum over the past two months.
Take a look at the 1-year chart of MAXR below with my added notations:
MAXR has formed key support in the $41.50 (blue) area over the past several weeks. The stock is also declining against a down trending resistance line (red). These two lines have MAXR stuck within a common pattern known as a descending triangle.
A short trade could be made on a break of the $41.50 support level with the expectation of a breakdown.
Want to Discover More Great Trades?
I have explored virtually every flavor of technical analysis and chart pattern known to mankind. The sad fact is that the vast majority of them don’t work at all.
That is why I recently put together this special report to help investors focus on the only 5 chart patterns that matter…the ones that lead to the most timely and profitable stock trades. Click below to get your copy now!
5 WINNING Stock Chart Patterns
Have a good trading day!
Good luck!
Christian Tharp, CMT
MAXR shares fell $2.04 (-4.05%) in premarket trading Wednesday. Year-to-date, MAXR has gained 25.63%, versus a 3.18% 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.
The post The Bearish Case for Maxar Technologies appeared first on StockNews.com