BT share price crashed to March lows. Is it safe to buy the dip?

BT Group (LON: BT.A) share price slipped to the lowest level since March 7th this year as investors focused on the company’s business. The stock dropped to a low of 160p, which was about 21% below the highest level this year meaning that the company is in a bear market.

BT Group growth slowing

BT Group is a leading telecommunication services company that provides its services in the UK. It offers telecom services to both individuals and companies. At the same time, it is the biggest provider of fiber services through its Openreach brand.

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BT has been in the spotlight in the past few months. First, British regulators are assessing the holdings of Patrick Drahi, a French billionaire who is now the biggest shareholder in the firm. He has a stake of 18%. It is unclear why regulators are investigating his stake although analysts believe it is to prevent a bid for the firm.

Second, PwC received a fine of 1.75 million pounds by the Financial Reporting Council. The fine was due to a case in 2017 when BT’s subsidiary in Spain committed fraud. As a result, BT was forced to adjust its annual report by about 513 million pounds.

Meanwhile, there is a threat that BT workers will soon go to a strike. In July, more than 40,00 workers went on strike. And now, workers at its Openreach division are expected to go on strike soon. The workers want better working conditions and pay.

BT published its quarterly results recently. The firm’s revenue rose by 1% to £5.1 billion, helped by relatively higher prices. Its adjusted EBITDA rose by 2% to £1.9 billion while its profit before tax fell by 10% to £0.5 billion. This decline happened because of increased depreciation. Capital expenditure declined by 17% to £1.3 billion because of the prior year’s investment in spectrum.

BT share price forecast

bt share price

The daily chart shows that the BT stock price formed a symmetrical triangle pattern between March 7 and July. It then made a bearish breakout this month and dropped to the lowest level in months. The stock has crashed below the 25-day and 50-day moving averages.

The MACD has moved below the neutral point while the Relative Strength Index (RSI) has moved to the oversold level. Therefore, the BT share price will likely continue falling as sellers target the next key support at 135p.

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