In his "No-Huddle Offense" segment of Mad Money Tuesday night, Jim Cramer reminded viewers that while dividends are a safe place to hide, only safe dividends are where you want to be. He said many people have asked him about CenturyLink Inc. (CTL) , the wireline telecom provider with a yield close to 12%. But he simply cannot recommend it. Let's check out CTL's charts and indicators and see what they have to say.
In the daily bar chart of CTL, below, we can see that earlier this month prices gapped below the cresting 200-day moving average line. The shorter 50-day moving average line has been pointed down since the middle of October. The volume pattern shows that volume has increased on a number of the declines the past three months, which is bearish but the On-Balance-Volume (OBV) line has yet to turn decisively lower.
The Moving Average Convergence Divergence (MACD) oscillator moved below the zero line in early October for an outright sell signal. The MACD is still pointed down.
In this weekly bar chart of CTL, below, we can see that prices have closed below the cresting 40-week line. The weekly OBV line is slowly weakening and the MACD oscillator crossed to a take profits sell signal in late September and could soon cross the zero line for an outright weekly sell signal.
In this Point and Figure chart of CTL, below, we can see a downside price target of $15.57 being projected.
Bottom-line strategy: Cramer does not like the company's prospects and the charts are bearish. That wraps it up.