Sony: Long-term outlook optimistic, but short-term concerns remain

Sony: Long-term outlook optimistic, but short-term concerns remain
Analysis
Mary Wild
Author:
Mary Wild
Published on: 06.02.2024 16:39 (UTC)
Post reading time: 2.62 min
963

Sony`s operating profit jumped 10% in the third quarter, exceeding expectations thanks to strong performances in its financial services, movies, and music businesses. The Japanese tech giant also announced plans to list its financial unit, Sony Financial Group, on the New York Stock Exchange in October 2025.


Key Points 


  • Profit: 463.3 billion yen ($3.08 billion), surpassing analyst estimates of 428 billion yen.


  • Financial Services: Strong performance, driving the decision to list Sony Financial Group in 2025. Sony will retain a 20% stake.


  • Gaming: PlayStation 5 sales reached 8.2 million units in the quarter, but operating profit fell due to higher hardware costs and lower game sales.


  • Movies & Music: Continued success, with "Marvel`s Spider-Man 2" selling 10 million copies.


  • Image Sensors: Profit rose 18% on increased sales. Sony is partnering with TSMC to build a second chip factory in Japan.


The news is likely to have a positive impact on Sony`s stock price, reflecting investor confidence in the company`s future prospects. The spin-off of the financial unit could create new investment opportunities, while the continued success of PlayStation 5 and the growing image sensor business bode well for future revenue growth. However, challenges remain in the gaming profitability and chip market competitiveness, requiring careful monitoring.


Future Outlook


  • Sony`s entertainment and technology focus holds promise, but the gaming division needs to improve profitability.


  • The success of the financial unit listing and PlayStation 5 sales will be crucial factors in Sony`s future performance.


  • The chip market partnership with TSMC is a strategic move with long-term potential.


Check Out Sony’s Technical analysis 



Overall, the technical analysis of the chart suggests that Sony stock is in a short-term downtrend. However, the long-term trend is still up, and the low trading volume suggests that the selling pressure may be easing. 


Let’s check out what is the current trend, what are indicators showing, also establish support and resistance levels and where is price going.  


Here are some observations


Overall Trend


  • The stock has been in an upward trend since the beginning of 2022, with a few brief periods of downward movement.


  • The price peaked at around 14909 JPY in January 2022 and has since slightly fallen to around 14612 JPY.



Moving Averages


  • The 50-day and 200-day moving averages are both tilted upward, indicating long-term uptrend.


  • The price is currently trading above both moving averages, which is a bullish sign.


Support and Resistance


  • There is a resistance level around $100 that the stock has struggled to break through in recent months.


  • The next support level is around $85. If the price falls below this level, it could indicate further downside potential.


Relative Strength Index (RSI)


The RSI is currently at around 56, which is considered to be a bit above neutral territory. This is considered to be neutral territory, neither overbought nor oversold.


MACD indicator is currently positive, which is a bullish sign


While Sony`s stock has seen some short-term corrections, the overall trend over the past two years remains positive. Both moving averages indicate a long-term uptrend, and the RSI points towards neutral territory. While a resistance level exists at 14,909 JPY, overcoming it could signal further bullishness. However, keep an eye on potential support around 12,800 JPY and of course other factors like recent news and overall market sentiment are all too important not to take into account.



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