During the Lightning Round of the popular Mad Money program Tuesday night one caller inquired about American Tower (AMT) : "This is trading on the T-Mobile US (TMUS) and Sprint (S) merger. I say wait a few days, then buy," said Jim Cramer.
Let's check out the charts of AMT to see what sort of upside might be seen in the months ahead.
In the daily bar chart of AMT, below, we can see that overall prices are in a positive position. AMT successfully tested the rising 200-day moving average line a number of times in November and December. Prices are also above the rising 50-day moving average line.
Trading volume looks like it has been heavier since September and the On-Balance-Volume (OBV) line has strengthened since early November and is not far from making a new high.
The Moving Average Convergence Divergence (MACD) crossed above the zero line in the middle of December for an outright go long signal. The indicator looks like it will now cross to the downside for a take profits sell signal.
In the weekly bar chart of AMT, below, we can see a longer-term bullish setup. Prices are above the rising 40-week moving average line. AMT successfully tested the 40-week line in November and early December.
The weekly OBV line has been steady the past four months and is not far from making a new high for the move up. A new high from the OBV line would be a strong signal that AMT is capable of making new price highs. The MACD oscillator looks poised to cross to the upside to give us a new outright buy signal.
In this Point and Figure chart of AMT, below, we used weekly high/low data to construct the chart. A potential longer-term price target of $274 is being projected.
Bottom-line strategy: AMT could see some further price softness in the short-run but the overall picture suggests we will see higher prices in the weeks and months ahead. I prefer to buy strength rather than weakness, so traders could go long AMT above $230 and then risk a close below $220. The $275 area is our price target.
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