Squeeze plays are the game of the day for today’s three big stock charts as we take a look at AT&T Inc. (NYSE:T), Intel Corporation (NASDAQ:INTC) and Starbucks Corporation (NASDAQ:SBUX). Each of these companies are either stuck in or emerging from a technical squeeze play that has implications for each stock over the next few weeks.
AT&T Inc. (T)
We’re seeing shares of AT&T get pushed into a squeeze play as they bounce between two critical trendlines.
Over the past week, the stock has been bouncing between its 50- and 200-day moving averages on what the charts identify as average volume. Zooming in to the intraday activity, we are seeing some surges in volume as the stock is touching-up on these trendlines. This tells us that the chart watchers are getting ready to strike.
In addition to the trendlines, the 50-day moving average is around the same level that matches up with the trendline that connects the stock’s recent trend of lower highs. This brings implications.
A break above the 50-day at $41.50 will take out the resistance that it has been placing on the stock while the move would break the trend of lower highs. This will attract a group of bullish traders to drive AT&T stock toward $43 in short order.
On the other side, failure for the 200-day to hold the shares are $40.50 will trigger selling pressure and a price target of $39. Our expectations are for the former situation to play out on AT&T shares.
Intel Corporation (INTC)
The semiconductor giant is still sleeping as relative performance against the semiconductor sector is lagging. Not shares are stuck in a squeeze play that may direct them lower over the short term.
A confluence of trendlines is restraining Intel’s daily movement right now. The 50- and 100-day moving averages are drawing a small channel for the stock to trade within the $36 and $36.50 range. After bouncing from the 200-day moving average, at $35, technical traders appear to be waiting to see how the current tight range will play-out before directing the stock any higher.
For now, the smart money’s on the stock holding the round-numbered $36 level as the market see some softness, then breaking through the overhead resistance of the 50-day to set a course for $38 over the next few weeks.
Starbucks Corporation(SBUX)
We’re not afraid to admit it, we were disappointed by Starbucks earnings results, especially since we liked the stock ahead of the announcement. Time heals some trades though as the coffee giant is charging back and is seeing a bullish transition in the trendline analysis.
Start with the fact that the stock is decisively taking out the 50-day moving average on today’s weaker market action. This alone puts a short-term target on Starbucks shares of $59, but there’s something going on below the current price that will get the technicians buying.
At $56, Starbucks’ 20-, 100- and 200-day moving average are all transitioning into bullish uptrends, indicating that the stock will gain support and momentum that will help to build a stronger intermediate-term trend.
This is all occurring as the stock has avoided hitting any overbought signals from its RSI.
The chart we see plays out like this. Starbucks runs to $59, sees a short-term pullback out of an overbought conditions and then sets course to take out the December highs with building support from the improved technical picture.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
