Shares of AT&T (T) have struggled for many months. With the company reporting its second-quarter earnings Thursday, let's check on the charts and indicators to see if we might be overlooking any positive clues.
In the daily bar chart of T, below, we can see we can see a lot of intense activity the past five months. T has rallied to the upside including a gap to the upside in April and then a sharp reversal in May including a gap to the downside. The moving averages have been little help in this wide swinging sideways market. T is trading below the declining 50-day moving average line and the declining 200-day line.
The On-Balance-Volume (OBV) line moved higher into May and then turned lower as traders quickly flipped from aggressive buyers to aggressive sellers. The Moving Average Convergence Divergence (MACD) oscillator has been bearish since late May when prices gapped lower.
In the weekly Japanese candlestick chart of T, below, we can see that the shares have struggled the past three years. The major averages have climbed significantly over the past three years but not T.
Trading volume has been active the past two years but the OBV line has been stuck in a long sideways trend. The MACD oscillator is currently back below the zero line in sell territory.
In this daily Point and Figure chart of T, below, the price gaps disappear and the software reads the X's and O's as bullish with a $45 price target.
In this weekly close-only Point and Figure chart of T, below, we can see a potential upside price target in the $57 area.
Bottom-line strategy: The daily and weekly Point and Figure charts of T are bullish but they ignore time and do not consider the price information from a gap. If T begins to show some bullish signals then aggressive traders could approach the long side of T. Meanwhile, the sidelines of T remain attractive.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
