China Mobile shares struggling at $35 resistance as US elections drag out

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Nov 6, 2020
  • China Mobile is handling the coronavirus threat very well and the profitability of CHL is very good
  • Total revenue has increased by 1.4% Y/Y in Q3 while net income was down only 0.3% Y/Y
  • Analysts stay „bullish“ on China Mobile and this stock could be a good "buy" opportunity

The US elections are closely watched, according to the latest news Biden is taking the lead in Georgia but the US presidential election continued to progress with a winner not yet officially announced. Joe Biden has a good shot at becoming the 46th President and Biden’s camp hopes they will cross the threshold of 270 very soon.

China Mobile (NYSE: CHL) shares have advanced from $30.6 above $32.6 in less than several days and the current price stands around $32.5. The main trend of this stock remains bearish and China Mobile is still not able to surpass the $35 resistance level.

Fundamental analysis: China Mobile stock is not overvalued

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China Mobile provides mobile telecommunications in China, the company serves 950 million mobile customers and 187 million wireline broadband customers. China Mobile is handling the coronavirus threat very well and it is attracting investors’ attention in this uncertainty on the financial markets.

China Mobile has released recently Q3 earnings results, total revenue has increased by 1.4% Y/Y while Q3 net income was down only 0.3% Y/Y.

China Mobile shares have extended its correction from the recent highs above $38, registered in the third week of August. Despite this, there is no reason to panic and as long the price of China Mobile stock is above $30 this stock remains in the “buy” zone.

Shares of China Mobile could be a good investment option and most financial analysts are expecting its price to rise considerably in the next several years. The profitability of China Mobile is better than that of its competitors, the company has a stable dividend and has the intention to sustain payouts.

In the last ten years, the revenue of China Mobile achieved constant growth and the company has paid more than $24B dividends to its shareholders in the last three years. If we compare total stockholders’ equity of $159B and the market capitalization of $131B, we can notice that this stock is not overvalued and maybe now could be a good time for buying China Mobile stock.

Technical Analysis: $30 represents a very strong support level

Data source: tradingview.com

When we take a look at the chart above ( one year period), we can see that the price of this stock has weakened from $44.9 to $30.12 and started to raise. On this chart, I marked important resistance and support levels.

The important support levels are $32 and $30, $35 and  $40 represent the resistance levels. If the price jumps above $35 it would be a “buy” signal and we have the open way to $38.

Rising above $40 supports the continuation of the bullish trend and the next price target could be located around $50. If the price falls in the upcoming period, every price in a range from $20 – $30 could be a very good opportunity for investing in China Mobile shares.

Summary

The US elections are closely watched, according to the latest news Biden is taking the lead in Georgia but the US presidential election continued to progress with a winner not yet officially announced. China Mobile has released recently Q3 earnings results, total revenue has increased by 1.4% Y/Y while Q3 net income was down only 0.3% Y/Y. Shares of China Mobile could be a good investment option and most financial analysts are also expecting its price to rise considerably in the next several years.

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