Summary
- An analysis of the technical chart suggests the stock may rise to $34.25.
- Option betting suggests bullish momentum is moving into the stock.
- Lower interest rates make AT&T yield attractive, which may help to boost shares.
- Looking for a portfolio of ideas like this one? Members of Reading The Markets get exclusive access to our model portfolio. Get started today »
AT&T's (T) struggles have been notable, but the stock may finally be about to turn the corner and head higher. An analysis of the technical chart and the options market suggests the stock could be about to break out extending its recent gains to as high as $34.25.
The last time I wrote about the stock was on January 30 when AT&T was Getting Crushed By DirecTV. At the time, I had thought the stock might retest its Christmas Eve lows around a price of $27.40. The stock never got close falling to a low of approximately $28.90.
Nearing A Breakout
Now, the stock is nearing a significant region of technical resistance between $31.20 and $31.80. Should the stock be successful in rising above that zone, it could go on to increase to approximately $34.25, a gain of about 10% from its price of roughly $31.20 on March 28.
Additionally, the relative strength index ("RSI") is rising and is suggesting bullish momentum is moving into the stock. The RSI is currently around 60, and it would need to rise above 70 before the stock would be considered overbought.
