T AT&T Analysis April 2016 (W,M,Q)
Created on Monday, 25 April 2016 10:16
Written by Austin Galt
AT&T Inc (T) provides entertainment, mobile, internet and voice servies and is listed on the New York Stock Exchange (NYSE) with a market capitalisation of around $230 billion. Price last traded at $38.21.
Let’s begin the analysis with the quarterly chart.
T QUARTERLY CHART
Price hit an all time high of $59.94 in 1999 before getting smashed into a low at $18.85 in 2003. Since then price has been edging higher making a higher high in 2007 followed by a higher low in 2008. This suggest a new bull trend is in play.
The Bollinger Bands show price at the upper band and I favour resistance to come in here and send price back down to at least the middle band to set up a higher low.
I have drawn two Fibonacci Fans so let’s run through them.
The bullish fan drawn from the 1984 low to 1999 high shows the 76.4% angle providing solid support. The 2003 low was around this angle while the 2008 low dipped marginally below. Price also recently found support at this angle before and I suspect one last test of this support angle is ahead and that is where the next higher low will form.
The bearish fan shows the 2007 high traded marginally above the 76.4% angle before dropping back sharply and eventually bottoming bang on the 61.8% angle. Price is now at resistance from the 88.6% angle and after a little pullback from here I favour price to then head back up and bust higher.
The RSI and MACD indicators are both looking a bit wishy washy with nothing too much to take away.
T MONTHLY CHART
The Bollinger Bands show the high last month traded well above the upper band so that is one sign a top is at hand. I expect price to move back down to at least the middle band to set up a higher low.
The Fibonacci Fan shows some nice price symmetry with the 2008 low at support from the 88.6% angle while the 2013 high was at resistance from the 61.8% angle. Price now seems to be flirting with support from the 76.4% angle and I favour price dipping back under this angle as it gives the support another test.
I have added Fibonacci retracement levels of the move up from 2003 low to 2007 high. The first correction was deep with the eventual higher low forming in 2008 around the 88.6% level. I am looking for price to move down to set up a higher low marginally beneath the 38.2% angle at $33.76.
The RSI was recently overbought and the MACD is bullish although the averages appear o to have diverged a little so a correction now looks on the cards.
T WEEKLY CHART
The RSI looks headed down after topping out in overbought territory while the RSI has just made a bearish crossover.
The PSAR indicator is now bearish after price busted the dots last week so that looks like the start of the correction.
The Fibonacci Fan shows some excellent symmetry with price. The recent low was at support from the 61.8% angle while the recent high was at resistance from the 38.2% angle. I favour the next higher low to be back around support from the 61.8% angle.
I have added Fibonacci retracement levels of this recent move higher. I am targeting the higher low to be back around the 76.4% level which stands at $33.03. Price may trade marginally lower but the 88.6% level at $31.97 might be a tad too far.
Summing up, I expect a correction now after which a solid uptrend will see price make new highs.
Disclosure – I have no financial interest in T.