AT&T (T) bounced to the upside in the past week and on just-released earnings but is this just a temporary low or something more important?
Let's check the charts and indicators again.
In the daily bar chart of T, below, I can see that the shares plunged from a peak in early February. T trades below the declining 50-day moving average line and below the negatively sloped 200-day moving average line.
The On-Balance-Volume (OBV) line shows weakness from April. The Moving Average Convergence Divergence (MACD) oscillator has made a higher low in July and created a bullish divergence when compared to the price action.
In the weekly Japanese candlestick chart of T, below, I can see a lower shadow on a candle pattern two weeks ago but the shape of the candle is not right for a hammer pattern. Prices are trading below the declining 40-week moving average line.
The weekly OBV line shows a decline from early 2021. The MACD oscillator is in a bearish alignment below the zero line.
In this daily Point and Figure chart of T, below, I can see a potential downside price target in the $8 area.
In this weekly Point and Figure chart of T, below, I can see the $8 target again.
Bottom-line strategy: Lows can happen in a short span of time. Bottoms typically take time to play out. Maybe T has made a low (though I doubt it) but it has not made a bottom. Avoid the long side of T.
