The ITV share price has been in a consolidation mode as investors observe the advertising landscape and the recent decision by Ofcom on Piers Morgan. The stock is trading at 115p, which is about 5% below the highest level this week.
ITV and Ofcom
ITV has had a difficult time recently. The public broadcaster survived the FTSE 100 reshuffle but its future on the blue-chip index is uncertain. While the recent rebound of the advertising business has been good for the company, there is a general feel that the growth will stall. At the same time, the company continues facing challenges as the competition with tech giants like Facebook, Twitter, Google, and TikTok rises.
The biggest story this week was that Ofcom, the UK media regulator announced that it had cleared the company’s flagship show and Piers Morgan. The investigation happened after the emotional interview of Meghan Markle and Prince Harry by Oprah. Following the interview, ITV fired Morgan after receiving thousands of comments.
In a 98-page report, the regulator cleared both Morgan and Good Morning Britain. As such, there is a likelihood that the company’s CEO will eat the humble pie and rehire the seasoned broadcaster. Doing so will help boost ratings, which have fallen by more than 35% since he left. So, is the ITV stock a buy or sell?
ITV share price forecast
The daily chart shows that the ITV share price has been under pressure in the past few weeks. The stock has dropped from 133p to 115p. Along the way, it has moved to between the 50% and 61.8% Fibonacci retracement level. The shares are also below the 25-day and 50-day moving averages, signalling that bears are in control. The stock has also formed what looks like a head and shoulders pattern.
Therefore, the shares will break out lower as bears target the next key support at 94.20p. This view will be invalidated if the stock rises above 122p.