Today’s three big stock charts are going to hit the cellular phone stocks, or at least those that have a lot to do with them. Each of the charts for Apple Inc. (NASDAQ:AAPL), Verizon Communications Inc. (NYSE:VZ) and Sprint Corp (NYSE:S) are suggesting that the recent spate of selling may be opening-up some short-term trading opportunities for the chart watchers.
Apple Inc. (AAPL)
A little more than a week ago, we pointed out that Apple shares looked as though they were setting-up for a decline to $150 as sellers were taking charge of the tape. Well, we were half right as AAPL stock did pull back to that price, but it kept going. Now shares are in a struggle to get back into their bullish technical trend.
- Apple shares broke right through their 50-day moving average last week and have been unable to even try to move back above the critical trendline again. This is a critical test for AAPL to remain in its bullish intermediate trend.
- Due to the exaggerated selling, AAPL shares are now trading with technically oversold readings. This indicates that the selling volume should lighten-up and give the stock an opportunity to move higher.
- The potential for Apple to make its next move to $135 is growing as the 50-day moving average is beginning to show signs that it is rolling over into a potentially bearish trend. Next week, AAPL stock must break above this trendline to avoid that forecast.
Verizon Communications Inc. (VZ)
What had been a darling of the market because of its strong growth and hefty dividend payment in 2016 has turned into one of the worst performers in 2017.
VZ stock remains in deeply negative territory against the market’s 10% gains and the attractiveness of the dividend has been shadowed by higher interest rates.
- Currently, Verizon shares are showing some potential for a rally to $49 as shares are attempting to break above their 50-day moving average. A break above this level will cause technical traders to bid VZ stock to the next level of resistance at $48.75.
- Momentum on Verizon shares is starting to build as the MACD is edging into positive territory. Normally, we don’t use this as a short-term indication, however chart watchers will begin to move on VZ stock as the market begins to see momentum build.
- Now the bad news, a rally to $49 is likely to be stopped in its tracks as this is the point where the 10- and 20-month moving averages are currently residing together. This confluence of long-term technical resistance is going to be overbearing and it is very likely to force the stock back into its intermediate and long-term bearish trend. Watch out below.
Sprint Corp (S)
A name that is working, at least for the traders, in the telecommunications group is Sprint.
This stock sees a lot of volatility, but has followed the charts well enough that it is becoming a favorite of short-term traders.
- Yesterday’s bounce just above $8 has S shares grabbing support right at their 200-day moving average. This trendline supported shares in May and allowed for the shares to rally from $7.80 to $9.00.
- The current RSI, while not having yet hit oversold readings, remains low. This indicates that Sprint stock has room to run overhead as the shares are far from being overbought or crowded. This is not the situation in many of S stock’s peer companies.
- The 50-day moving average for Sprint stock is currently residing at $8.35. This exact trendline halted the ascent of the shares earlier this week. That said, the trend in the 50-day is transitioning into a potentially bullish trajectory. A move above this trendline next week will propel S stock back to $9 with an opportunity for the momentum to carry it higher.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
