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Fan Yang

AT&T (T) Finds Support at 38.00; Upside Expectation Limited to 40.50

We have been stalking the bearish correction in AT&T's (T) stock price. Recently, we anticipated the bearish break below the a consolidation range support. Then we noted a key support around 38.00 where T is indeed finding buyers.

AT&T (T) Daily Chart

(click to enlarge)

Support at 38:
- The 37.50-38 area represented a support/resistance pivot area. 
- Also, there was a rising trendline. 
- Furthermore, the RSI dipped below 30, a sign of the market being oversold.

Market in Consolidation:
- The market has been in consolidation since summer of 2016. 
- T could be in the middle of an ABC correction, which would project the current downswing below the Nov. 2016 low of 36.10. 
- On the other hand, it is just as likely that the consolidation is more of a sideways one. For example, we could see a triangle forming, in which case price might rally up to 41, 41.50 before finding resistance.
- If we juggle both scenarios, we could anticipate a rally towards 40, 40.50. The 39.50-40.50 area is a key support/resistance pivot area. 
- If T gets turned around here around 40, then the ABC correction scenario is more likely, and we should anticipate price coming down to at least test the 36-36.10 support area with 35 in sight.

AT&T (T) Weekly Chart

(click to enlarge)