BT share price plummets 8% after revealing a huge rise in costs

The BT share price is in freefall and heading for its worst day in more than three years after disappointing the market with its latest earning results.

BT Group plc (LON: BT) is trading at 169.30p, down 14.45p (-7.90%).

The UK telecom and internet giant today released its results for the first fiscal quarter of 2021. The data, which was below expectations, revealed revenue declined by 3% in three months to June. Furthermore, before-tax profits fell by 4%.

Although, the main talking point for investors is the 63% increase in capital expenditure (Capex) for the period. Capex increased to $1.5 bln, swelling the group’s debt load to £18.6 billion.

This was not taken well by the market, and the BT share price succumbed to heavy selling pressure, damaging the previously positive looking technical backdrop.

BT Group technical outlook

The daily chart shows BT is now trading below the 50, and 100-day moving averages at 187.63 and 171.16p, respectively.

Furthermore, the Relative Strength Index has turned sharply lower. However, its 31.10 reading indicates the rapid decline is almost reaching oversold territory.

Unfortunately for the bulls, the next significant support level is not seen until 148p, where the January high and the 200 DMA at 148.37 align.

Considering the negative momentum, it appears likely that the BT share price will soon be testing the resolve of the 148p support.

Unless the price manages to regain the 100 DMA at 187.50p, the bears will remain in the driving seat. However, above 187.50p, the outlook swings back in favour of the bulls.

BT share price chart (Daily)

Bt Share price