Trade of the Day: Verizon Communications Inc. (NYSE:VZ)

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This bullish surge on Wall Street has been felt far and wide, and Verizon Communications Inc. (NYSE:VZ) has been no exception.

In mid-May, Verizon completed a “head-and-shoulders” bearish reversal pattern. Since that time, the stock has been retesting the neckline of that pattern to see if the former support level would hold up as resistance. It was holding up until Tuesday, when the stock broke cleanly above $51. This bullish break tells us that the bearish head-and-shoulders pattern is no longer valid, which means it’s time to get bullish on VZ.

The general bullish momentum on Wall Street couldn’t have come at a better time for Verizon. The company recently announced that it has come to terms with its more than 40,000 striking workers from the Communications Workers of America (CWA) and the International Brotherhood of Electrical Engineers (IBEW), which should help Verizon accelerate its acquisition of new cable TV and broadband Internet customers.

With this bullish turnaround, VZ could make it all the way back up to its early-April highs above $54, but there is the potential for some short-term resistance to show up at $53 where the stock gapped lower on April 7. Here’s our recommendation:

 ‘Buy to open’ the VZ July 52.50 Calls (VZ160715C00052500) for a maximum price of $0.48.

You can learn more about identifying price patterns and using them to project how far you think a stock is going to move in our Advanced Technical Analysis Program.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/06/trade-of-the-day-verizon-communications-inc-nyse-vz/.

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