AT&T stock is rallying after better-than-expected earnings. Here are the upside levels to watch now.
AT&T (T) – Get AT&T Inc. Report is rallying on Thursday, up more than 4% after reporting earnings. For long-time shareholders, it’s been quite a nice reprieve over the last few weeks.
The stock rode higher earlier this month once the company completed its spinoff of Warner Bros Discovery (WBD) – Get WARNER BROS. DISCOVERY, INC. Report. After consolidating over the past week, shares are on the run again.
Today’s rally comes after the company was able to deliver a top- and bottom-line earnings beat.
When Netflix (NFLX) – Get Netflix, Inc. Report reported earnings a few days ago, it reported a dip in its subscribers. This had investors worried about streaming losing steam. AT&T proved that theory wrong.
The HBO and HBO Max unit added 12.8 million new subs versus the same quarter last year and 3 million in the most recent quarter.
So far, the report seems to be giving the stock a nice jolt to the upside. With a low valuation and a 5.5% dividend yield, are the technicals about to start working in AT&T’s favor as well?
Trading AT&T Stock
Daily chart of AT&T stock.
Chart courtesy of TrendSpider.com
Despite a market-wide reversal in the main US stock indices, AT&T stock is pushing higher. Shares are going weekly-up over last week’s high of $20.12. Notably, it’s also thrusting the stock above the key $20 level.
Assuming the stock can close above this level, it will have investors looking at the 2022 high at $20.74.
AT&T has been a terrible laggard over the years. However, could it be a leader in this current environment where defense stocks are leading? For instance, Verizon (VZ) – Get Verizon Communications Inc. Report — which reports earnings tomorrow — has held up quite well this year.
If AT&T can maintain momentum and clear $21, it’s not out of the question that the stock could eventually climb toward $23. There we find the 161.8% extension and a major gap from last May.
If the stock goes on to fill that gap, it will send AT&T up to $23.58.
On the downside, bulls should use caution if the stock can’t stay above $20. That wouldn’t necessarily mean the end for AT&T stock, but it would keep the $19.25 level in play.
If it were to lose this level — and thus the 10-day and 200-day moving averages — it would open the door to the 21-day and the gap-fill level down at $18.30.
For now though, the relative strength that AT&T’s displaying is encouraging. Let’s not fight the trend until it ends.
