Reader Request – AT&T (T)

By | November 16, 2014

A reader requested an analysis of the the AT&T (T) chart.

The weekly chart shows the stock price consolidating in a horizontal channel since May of this year, with support in the $33.25 area and resistance near $35.25. Shares broke and closed above the two year resistance level this week, making an all-time high. The consolidation phase has moved the Bollinger Bands (blue), a measure of standard deviation based on price, within the Keltner Channels (red), a measure of standard deviation based on average True Range, creating a classic “squeeze” condition. This is reflected in the low reading on the Bollinger Bandwidth indicator at the bottom of the chart, and often precedes volatile moves.

15. T squeeze weekly  chart

The stock looks like a good/risk reward buy at its current level with an initial percentage trailing stop under the Bollinger Band centerline.

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