AT&T Inc. (NYSE:T): Very Bullish Long Term Setup

Albany, New York (09/23/2014) – AT&T Inc. (NYSE:T) (Closed: 35.50, Up: 0.08%) had a positive closing on Monday after an initial dip in the morning. The company plans to buy Fullscreen in a joint venture with Peter Chernin, in a step to expand its reach in the online video market. Fullscreen develops music-related content, distributed through YouTube. The market seems to have taken the step in a positive spirit as the rally for the last six sessions show but the bullish momentum may be slowing down a bit. The net gain in the last two sessions, though positive, has not been great and if the current rally turns out to be the last leg of a corrective rise from the August low of $34.18, then a sudden selloff from the higher levels, especially from the 50% retracement level at $35.83 or around the golden ratio area of $36.22-37 may not be that surprising. The poor volume at 16.3 million against an average of 19.5 million is not very inspiring for the bulls when the price is advancing.

The weekly chart shows the area of $34.50-10 to be a solid support and on any deeper correction; an initial bounce at least can be expected from that area. The bulls could be more confident of a rise but the formation of the first weekly candle in the month of August has been worrisome, with the sharp rejection and near vertical crash of the price.

The secular investors would notice a decade long pattern though, and they would be waiting patiently. There is a huge Double Bottom or a Cup & Handle pattern, whatever one may call it, on the monthly charts. The breakout level comes at $38-39 but the implication is tremendous. A successful breakout will signal a rally to $44-45 as only the initial target and then extend to much more.

Prudent investors will keep this stock on their watch list and buy on a break above $38-39.

About the Author

Coper graduated from the University of Chicagi with majors in political science and journalism.

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