Analyzing FEZ’s Telecommunication Industry in 2015

The SPDR Euro Stoxx 50 ETF’s (FEZ) telecommunication industry provided a 5% return in 2015. Telecommunication stocks like Orange (ORAN), Telefonica (TEF), and Deutsche Telekom returned 8%, -12.5%, and 25%, in 2015.

Orange and Deutsche Telekom’s positive performances were taken away by Telefonica’s negative performance. Telefonica is a Spain-based telecom company. Due to the poor earnings in the last two quarters, the stock had a negative performance. Recently, Morgan Stanley (MS) downgraded the stock from “neutral” to “underweight.”

Orange is trading 3% above its 100-day moving average, at par with its 20-day moving average, and 3% below its 50-day moving average. The 50-day moving average is a strong resistance point for the stock. In the last four months, the stock struggled to cross its 50-day moving average. Deutsche Telekom is also trading 3% above its 100-day moving average, at par with its 20-day moving average, and 1% below its 50-day moving average.

Telefonica is trading 12%, 10%, and 6% below its 100-day, 50-day, and 20-day moving averages. The 100-day moving average is a strong resistance point for the stock. It struggled to cross its 100-day moving average in the last six months.

Analysts’ estimates suggest upsides of 22%, 7%, and 5% for Telefonica, Orange, and Deutsche Telekom over the next 12-month period from their current levels as of December 29, 2015.

In the next part of this series, we’ll analyze the performance of the Eurozone’s (HEDJ) pharmaceutical industry.