ITV Share Price August Forecast: It is Not Looking Good

The ITV share price has struggled in the past few weeks. The stock is trading at 112.50p, which is about 16% below the highest level in July. It is also at the lowest level since March this year bringing its total market capitalisation to more than 1.57 billion pounds.

ITV news. The media landscape in the UK has improved modestly this year as advertisers boost their advertising budgets. This is evidenced by the first-half results. The company said that its total revenue increased by 27% to more than 1.54 billion pounds. This compared to revenue of more than 1.21 billion pounds in the same period in 2020. 

At the same time, vaccinations and the reopening has made the firm possible to shoot programs for its Total Media & Entertainment business. The division’s revenue rose by 25% to more than 798 million pounds. Therefore, there is a possibility that the two divisions will keep doing well this year.

Meanwhile, the Channel 4 issue has been around. The government has expressed its ambition to take the company private through a merger with ITV. During the weekend, it was reported that America’s Discovery Communications was considering placing a bid for the firm. The terms of the deal were not revealed. 

Therefore, there is a possibility that a bigger bidder could decide to scoop ITV, which is reasonably valued. Recently, more American firms have been acquiring British businesses. This week, Meggitt was acquired by an American competitor. Morrisons is also being acquired while Sweaty Betty was sold for 300 million pounds to an American company.

ITV share price forecast

The daily chart shows that the ITV stock price broke out below the rising wedge pattern in July this year. In price action, a rising wedge pattern is usually a bearish sign. The price has also moved below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved to the oversold level. 

It is also above the 50% Fibonacci retracement level. Therefore, the stock will likely maintain the bearish trend in August. If this happens, the next key level to watch will be the 38.2% retracement at 94.50p. On the flip side, a move above 130p will invalidate this view. This prediction is in line with my previous ITV stock forecast.