- MARS stock price recently surpassed its 50 EMA, which may result in a bullish trend.
- The stock has posted major positive changes in its annual report.
- The MARS stock has bounced off its support; will it break past its resistance?
The decline in Marston’s stock price was initiated by its negative growth annual report in 2019, causing the price to plummet from GBX 129 to GBX 37.14 in a remarkably short span of less than four months.
Despite efforts to recover, the stock struggled due to ongoing financial challenges that prevented the bulls from regaining confidence. However, a turning point emerged in September when the company posted an impressive year-on-year revenue growth of nearly 100%.
This robust revenue growth was followed by an even more remarkable surge in gross profit, soaring by over 300%. The company achieved this by successfully elevating its gross margins from 18% in the previous year to an impressive 41%.
Of significant importance, Marston achieved a significant milestone by becoming net profit positive for the first time in the past three financial years. This achievement was marked by a net profit margin of 17%, indicating a substantial improvement in the company’s financial performance.
A notable positive development for Marston was its substantial reduction of debt, evident by a decline in the Debt to Equity ratio from 4.03 to 2.51. This reduction in debt demonstrates the company’s proactive efforts to improve its financial health and bolster investor confidence.
Technical Analysis of MARS Stock Price
At the time of writing, the stock price of Mars has tested its support level and is showing signs of a potential bounce. The stock is positioned within a range defined by certain support and resistance levels, and the indicators are providing some insights into the potential future movement.
Support: The initial and immediate support is located at GBX 28.0, which aligns closely with the current market price, suggesting the presence of a demand zone. The second support level is at GBX 25.95, established during the market’s performance in March 2020.
Resistance: The primary resistance is situated at GBX 33.20, backed by significant trading volume. A second resistance level is positioned higher at GBX 36.30.
MACD: The MACD graph has recently witnessed a short-term decline, with the signal line crossing above the MACD line. This interaction has led to a weaker price action, resulting in the current levels of the MACD line at 0.741 and the signal line at 0.702.
RSI: The RSI line has recently crossed its SMA, indicating robust buying activity in recent times. Both lines are presently situated within the neutral territory. The RSI value stands at 55.7, while its SMA is positioned below at 50.13.
EMAs: The 50-day EMA is closely aligned with the price at GBX 31.40, indicating a proximity between the two. Conversely, the 200-day EMA is situated above at GBX 36.85, demonstrating a slight bearish trend. The convergence of these two EMAs suggests a potential bullish trend if a crossover occurs in the future.
Conclusion
The prediction for the MARS stock price is influenced by its ongoing efforts to improve its financial performance and achieve net profit positivity. While there has been some positive impact on its pricing momentum, the prolonged downtrend has instilled fear among investors, leading to continuous selling.
Recently, the price managed to surpass its 50-day EMA, signaling a potential shift in sentiment. If the price can maintain its position above this moving average and subsequently break through its first resistance level, which is accompanied by significant trading volumes, a potential trend reversal might occur.
Technicals
Support: GBX 28.7, GBX 25.95
Resistance: GBX 33.05, GBX 36.30
RSI: 55
50 EMA: GBX 31.40
200 EMA: GBX 36.85
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
