When we reviewed shares of Verizon Communications ( VZ) back on August 31 when we wrote, "Avoid the long side of VZ as the short and long-term charts are bearish."
On Friday shares of VZ sank to a new 52-week low on the heels of missing analyst estimates of Q3 subscribers.
Let's check the charts and indicators.
In this daily bar chart of VZ, below, we can see a downside price gap on Friday. A new 52-week low was reached. Prices are well below the declining 50-day moving average line and below the weak 200-day line.
The On-Balance-Volume (OBV) has made new lows for the move down as well and confirms the observation that sellers of VZ have been more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is bearish.
In this weekly Japanese candlestick chart of VZ, below, we have a negative picture. Prices have made a "parabolic" decline the past few months. VZ is below the bearish 40-week moving average line. The weekly trading volume has not given us a clue that weak hands have sold and strong hands have bought.
The weekly OBV line is bearish and the MACD oscillator is bearish.
In this daily Point and Figure chart of VZ, below, we can see that prices have reached and exceeded a downside price target in the $36 area.
In this weekly Point and Figure chart of VZ, below, we used a five box reversal filter. Here the software suggests a price target in the $31 area.
Bottom line strategy: In full disclosure I have been a VZ customer for over 25 years but that loyalty does not make the charts more attractive. VZ could fall further in the weeks ahead.
We are witnessing one of the most extreme disconnects in decades between the Nasdaq 100 and Russell 2000.
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