In any area of the market, you’ll find both winners and losers…and the communications industry is no exception.
Based on the technical analysis performed by the Profit Scanner powered by Recognia in its daily market scan, here are four communications stocks that are flashing bullish chart patterns.
4 Communications Stocks for Bullish Profits: Sprint Corp (NYSE:S)
Sprint Corp (NYSE:S) had a rough 2014 but is on the rebound in 2015, up more than 28% for the year to date — and the technicals suggest that this action will continue. At the April 23 close, the Profit Scanner found that Sprint had made a Head and Shoulders Bottom that carries anywhere from 35% – 43% potential upside.
This pattern starts off as investors accumulate shares at the bottom of a major downtrend. During that time, the stock makes three major declines, with the lowest in the middle (the “head”) and two higher ones on either side (the “shoulders”). When the share price breaks through resistance at the “neckline” between the two shoulders, it confirms that the stock is embarking on a new uptrend.
Volume-wise, you’re looking for the trading volume to be highest during the first two declines before tapering off through the right shoulder. Then you want to see a sudden surge on the breakout above the neckline, as that’s confirmation of the reversal.
Sure enough, Sprint’s 3.5% gain on April 23 came on significantly above-average volume of more than 16 million shares traded.
Based on this particular Head and Shoulders Bottom, the Profit Scanner is expecting Sprint to reach the $7.10 – $7.50 level in the next 151 trading days. (So, basically, a gain of roughly 40% in about seven months.)
The chart work supports near-term bullish trades on Sprint as well. The stock’s Commodity Channel Index and Momentum indicators both just turned green — both short-term bullish signals — and it overtook its 50-day moving average on April 22 — an intermediate-term bullish signal.
4 Communications Stocks for Bullish Profits: CBS Corporation (NYSE:CBS)
CBS Corporation (NYSE:CBS) is looking like a “buy” as well. On April 24, the Profit Scanner identified a bullish Continuation Diamond on CBS’ chart that suggests CBS stock will gain 23% – 30% in the next 272 trading days.
You can see the “diamond” shape form in the above chart as CBS stock first made higher highs and lower lows in a broadening pattern, then traded in a tighter range after the highs peaked and the lows started trending higher.
All of this took place during a consolidation period at the bottom of a downtrend…then CBS shot higher through the top of the diamond, resuming its prior uptrend.
Since then, CBS has also had two short-term bearish signals, from the Williams %R oscillator and a bearish Engulfing Line pattern, respectively. Buy-and-hold investors could use this as an opportunity to “buy the dip” and ride CBS stock higher to its long-term target range of $76 – $80.
4 Communications Stocks for Bullish Profits: Time Warner Inc (NYSE:TWX)
Next up is media conglomerate Time Warner Inc (NYSE:TWX). Like CBS, TWX just completed a bullish Continuation Diamond; in this case, the pattern was confirmed on April 24, and the Profit Scanner is looking for 12% – 14% long-term upside.
The specific price target for Time Warner is $95 – $97, which is expected to occur within the next 104 trading days.
Besides the bullish Continuation Diamond, you can also see TWX overtaking its 50-day moving average in the above chart — an intermediate-term bullish signal. On April 27, Time Warner’s Momentum indicator turned short-term bullish as well.
In other words, TWX is looking like a strong, bullish opportunity for just about any trading horizon.
4 Communications Stocks for Bullish Profits: DirecTV (NASDAQ:DTV)
DirecTV (NASDAQ:DTV) also has a beautiful chart at the moment. On April 23, DTV stock gained 3.3%, breaking above resistance to confirm its own bullish Continuation Diamond. Here, the Profit Scanner is looking for DTV to hit $93.25 – $94.75 in the next 131 trading days.
Since then, DirecTV stock has racked up a series of shorter-term bullish signals. On April 24 alone, DirecTV had four indicators turn green: the MACD, Commodity Channel Index, intermediate-term KST and Momentum indicators.
The same day, the 21-day moving average crossed above the 50-day moving average — another intermediate-term bullish signal. As with S, CBS and TWX, DTV stock’s technicals suggest that it’s a good bet for those looking for a quick trade as well as for a longer-term investment.
Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.