Continuing our search for market leaders off the August/September market lows, we found another Telecom name that was bottoming: the Canadian communications company BCE (BCE) which trades on the Toronto Stock Exchange and in the U.S. on the NYSE. We'll look at the latter.
BCE had three attempts (see the chart above) to break through $48 between last November and February 2015. Every rally attempt failed and prices began their correction down to $39. A shift happened this summer as prices began to creep higher, and the On-Balance-Volume (OBV) line moved up to confirm the price action.
In this longer-term view of BCE (above), we changed to a simple line chart. This chart shows just the Friday closing price for BCE. The $40-$41 area has been important to this name. On the way up this area has been giving some resistance. Last year and this year the area has been giving support.
Now check the two lower panels. Note the higher low from the slow stochastic indicator and from the momentum study. These two bullish divergences suggest a worthwhile rally for BCE in the weeks ahead.
Traders should favor the long side risking a close below $38.