Dish Network Corp. (DISH) shares rallied over 4.52% to $64.00 after yesterday’s announcement about be added to the S&P 500. Dish will replace Linear Technology Corp. (NASD:LLTC) in the S&P 500 effective prior to the open on Monday, March 13. S&P 500 constituent Analog Devices Inc. (NASD:ADI) is acquiring Linear Technology in a deal expected to be completed soon pending final closing conditions.
Shares are tentatively forming a double-top pattern with the high made after reporting fourth quarter results on Feb 22nd. Dish reported fourth quarter earnings of $0.70 a four cent beat of the analysts’ consensus of $0.66. Revenue came in at $3.72 billion a miss from the $3.75 billion estimate.
Price action on the daily chart shows that bullish move is facing key resistance from the psychological $65 handle. If price continues to respect that level, key support may come from the $62.60 region. If bearish reversal continues, price may find support from the 50-day SMA which currently trades at the $61.14 level. If we see noted resistance level taken out, further bullishness could target the $67.50 region.The Trade: Buy DISH at $63.50, with a stop loss at $62.50 and a take profit at $66.50. The Risk/Reward Ratio is 1:3