Vodafone share price just flashed a golden cross ahead of earnings: will it jump?

Vodafone share price has remained in a narrow range in the past few days and is now hovering at its highest point since August 2022.

VOD has jumped to 118p, up by 90% from its lowest level in December last year, giving it a market capitalisation of over $37 billion.

Vodafone to publish its earnings on Tuesday 

The VOD stock price has held steady in the past few months, helped by the ongoing turnaround strategy that has seen it exit some key slow-growing businesses in Italy and France.

It has used some of these funds to increase its shareholding in some of its key markets, like Kenya and the UK.

Most importantly, Vodafone has continued to grow its service revenue in Germany, its biggest market. The most recent numbers showed that the service revenue jumped by 0.7% in the second quarter of its fiscal year. 

Its Africa service revenue grew by 13.5%, helped by its financial services solutions such as M-Pesa. 

This growth was offset by the UK business, whose revenue dropped by 0.5% because of its business segment.

The company’s profitability continued growing, with the EBITDAaL rising by 2.3% to €2.8 billion. However, its operating profit dropped by 52.7% because of its M&A  and its Indian operations.

The company continued returning cash to shareholders, completing a €3.5 billion share buyback program last year and commencing a new €500 million tranche.

Therefore, the upcoming results will provide more colour on its operations and whether they are improving or not.

In the last earnings report, the management guided towards its EBITDAaL being between €11.3 billion and €11.6 billion, and its free cash flow being between €2.4 billion and €2.6 billion.

Analysts expect the real numbers to be slightly higher than the guidance.

Vodafone's stock price has held steady in the past few months as investors have continued to move to value names, especially those with strong dividend yields.

Also, the company is less exposed to the ongoing Middle East crisis.

Vodafone share price technical analysis 

VOD stock chart | Source: TradingView 

The weekly timeframe chart shows that the VOD share price has been in a strong uptrend in the past few months, moving from a low of 62.38p, where it formed a double-bottom pattern with a neckline at 80p.

The stock has now formed a golden cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other.

A golden cross is one of the most common bullish continuation signs in technical analysis.

Top oscillators like the Relative Strength Index (RSI) and the MACD have continued rising in the past few months.

It is now attempting to move above the important resistance level at 120p, its highest point this year.

Therefore, the most likely scenario is where the stock continues rising as bulls target the next key resistance level at 141p, its highest point in February 2022.

This target is about 20% above the current level. However, this forecast is based on the weekly chart, meaning that it may take time.