AT&T (T) shares are lower in early morning trading Friday after analysts at JPMorgan lowered their rating on the telecom giant to "neutral" and rduced their price target on the stock. Let's check the condition of the charts and indicators.
In the daily bar chart of T, below, I see a weak technical setup. The shares are in a downward trend and trade below the negatively sloped 50-day and 200-day moving average lines. The trading volume has increased since the middle of April, suggesting to me that traders are voting with their feet.
The math-driven On-Balance-Volume (OBV) line has weakened since early April and tells us that sellers of T have been more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside from below the zero line for a fresh sell signal.
In the weekly Japanese candlestick chart of T, below, I can see that share prices have been weak for the past three years. T trades below the bearish 40-week moving average line.
The weekly OBV line has been weak for the past two years. The candles are mostly red (bearish) and I do not see lower shadows that are giving us strong signals. The MACD oscillator is bearish.
In this daily Point and Figure chart of T, below, I can see a potential downside price target in the $11 area.
In this second Point and Figure chart of T, below, I used weekly price data. Here the chart also suggests the $11 area as a price target.
Bottom-line strategy: This is easy -- avoid the long side of T. At some point in the future T should hopefully make a bottom, just not now.
