Last night in the "Lightning Round" of Jim Cramer's "Mad Money" show, he favored Verizon Communications (VZ) . Looking at the charts and indicators of VZ this morning I can see that this stock has good upside potential and a nice dividend too. Check it out.
In this daily bar chart of VZ, below, we can see a bullish golden cross of the 50-day moving average and the 200-day moving average line in late July. The signal did not catch the low of course but it did capture the August advance. Prices have been making a rectangle continuation pattern since August and it looks like we are getting close to an upside breakout.
The daily On-Balance-Volume (OBV) line shows a rise from November and another move up from early June showing that traders have become more aggressive on the buy side.
The Moving Average Convergence Divergence (MACD) has been above the zero line since June and looks poised to turn upwards to a fresh go long signal.
In this weekly bar chart of VZ, below, we went back four years to show how important the $56 level is to the bull case. Prices are above the rising 40-week moving average line and the pattern since the middle of 2016 looks like a large saucer pattern or cup and handle if you prefer.
The weekly OBV line is not in sync with the price action and the MACD oscillator is poised for a possible take profits sell signal.
In this Point and Figure chart of VZ, below, we can see the advance from 2015. A trade at $56.36 will be a small breakout and bullish. A longer-term price target of $69 is being projected.
Bottom line strategy: In full disclosure I am a VZ customer and have been for more than 18 years. If you plan on retiring in the Caribbean this is not the carrier for you. Traders, however, could go long VZ on strength above $56 looking for gains to around $70. Risk below $53.