A sell-side firm has rated the shares of T-Mobile (TMUS) a new "outperform" with a $159 price target. Let's check out the charts and indicators to see if we should answer the call.
In this daily bar chart of TMUS, below, we can see a bottom formation from September. The shares show a "neckline" around $135 and look ready to break out over this chart barrier. TMUS is trading above the rising 50-day moving average line and above the still declining 200-day line.
The daily On-Balance-Volume (OBV) line made a low in late January and has turned modestly higher telling us that there has been a shift from aggressive selling to aggressive buying. The Moving Average Convergence Divergence (MACD) oscillator just turned up above the zero line for a new outright buy signal.
In the weekly Japanese candlestick chart of TMUS, below, we can see an improving technical picture. Prices made a low in January and have rallied above the bottoming 40-week moving average line. The candles are making upside progress but without upper shadows telling us that traders are rejecting the highs.
The OBV line has turned upwards in the past five months and the MACD oscillator is in a bullish alignment above the zero line.
In this daily Point and Figure chart of TMUS, below, we can see an upside price target in the $159 area -- the same price target as the fundamentals suggest.
In this second Point and Figure chart of TMUS, below, we used weekly price data. Here the software yields a target in the $164 area.
Bottom-line strategy: Traders could go long TMUS at current levels. Risk to $125. The $159-$164 area is our price target for now.
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