Take Profits in Comcast at All-Time Highs -- Plus Jim Cramer's Take
Shares of Comcast (CMCSA) - Get Report have been on fire lately, climbing about 3% last week and netting a new all-time high at $67.18. This translates to gains of 25% since my advice to buy the stock on Jan. 29 at around $53 per share.
And on April 26, when the stock traded at around $60, I suggested to add more to your position, betting the stock would break $65 per share and making a new 52-week high. This, too, has proven to be a well-timed trade.
Jim Cramer and Research Director Jack Mohr of Action Alerts PLUS reiterated their price target of $70 for Comcast stock on Friday. They see Comcast's deal withNetflix (NFLX) - Get Report to provide the streaming service access to Comcast's cable boxes as a positive sign of "Comcast's willingness to adapt."
Comcast is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells CMCSA? Learn more now.
But now may be the time to take some money off the table and move on to the next great idea.
Take a look at the chart below, courtesy of TradingView.
Comcast shares closed Friday at $67.11, up 1.28%. The stock was at $67.30 on Monday after the open. The stock, which is up 19% year to date, has outperformed the 4.21% rise in the S&P 500 (SPX) index. And Comcast has maintained momentum, rising almost 30% since its January low of $52.34.
But how much more room is there to run, and where's the next leg of growth going to come from?
Fundamentally, Comcast shares are now priced at 19 timed forward earnings, compared to a price-to-earnings ratio of 16.5 for the average stock in the S&P 500 index. So Comcast is no longer as attractive as it once was.
The charts, for now, suggest the shares have gone as far as they can go.
Comcast has now risen well above the critical 20-day ($63.56 -- blue line), 50-day ($62.65 -- pink line) and, most importantly, 100-day ($61.36 -- yellow line) moving averages. The fact that the stock is almost 10% above the 100-day average suggests that some consolidation is required. This means profits will be taken. Support is now at around $64.30, or 4% below current levels. Shares have soared some 23% in six months, and 25% since January 29.
For now, it looks like Comcast stock has a better chance of falling to support before moving higher.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.