The last time we reviewed Dow Jones Industrial Average component Verizon Inc. (VZ) , back in July, we wrote that, "VZ could rally in the days and weeks ahead to the $49 area or a 50% retracement of the decline from January. When prices reach that area we will have to check the charts again. Meanwhile, if you trade VZ from the long side I would suggest a sell stop at $43."
VZ did rebound to the $49 area and we got caught up with other stocks instead of returning to Verizon as promised. Very belatedly let's check on the latest charts and indicators of VZ to see if it is a buy or a sell now.
In this daily bar chart, below, we can see a price peak in late January and now VZ is below its declining 50-day moving average line and below the cresting 200-day line. The daily On-Balance-Volume (OBV) line has weakened this month and tells us that sellers of VZ have become more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator is in a bearish mode below the zero line.
In this weekly bar chart of VZ, below, we see more bearish signals. VZ is trading below the cresting 40-week moving average line. There is support at $44 from November and in the $44-$43 area from June. The weekly OBV line shows a peak in January and subsequent weakness. The weekly MACD oscillator crossed to the downside in early February for a take profits sell signal.
In this Point and Figure chart of VZ, below, we have a modest downside price projection of $44.80 shown. While this could mean that prices are not weak enough to break the 2017 lows, you never know how far down a decline will extend once it starts.
Bottom line: VZ is oversold or extended on the downside so we could see prices hold or even bounce in the short-run but the trend is down and our favorite indicators are bearish so I would not to trade VZ from the long side.