Verizon Communications Inc. (NYSE:VZ) had a quiet session with the closing price coinciding with the open and the volume remaining exactly at par with the average volume of 14 million. This indifferent trend for the day, going nowhere after jumping up and down, is very similar to what is happening in the larger timeframe too as clearly visible from the chart.
Verizon Communications Inc. (NYSE:VZ) sends signals that it is neither concerned about any churning in the wireless subscribers in the first quarter of 2015, nor the wireless business gradually getting grabbed by the multiple system cable operators. The company believes in the longevity of the LTE technology and trusts that it will not be replaced anytime soon by any kind of MVNO. It also accepts that competition in the form of a price war is going to increase, resulting into more churning but the benefit of possessing a managed wireless network in the LTE-Unlicensed spectrum may offset that.
The short term volatility in the stock may be inspired by the rally in the Dollar and the anxiety over the impending rate hike by the US Fed as that may increase the cost of capital but just a single glance at the long term chart of the stock helps to see the actual strength.
In the period of 2010-2012, the stock enjoyed a fantastic run, which nearly doubled the price. Since the beginning of 2013, it has established sideways ranges which can only be taken as a consolidation phase. The volume in this sideways phase has remained poor, showing the absence of any distribution at the higher levels.
In the short term, the price can make a dip towards the support band of $45-46 but that should be utilized as an excellent opportunity to get in and accumulate the stock.
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