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We are opening a new bullish trade on Verizon Communications (NYSE:VZ). One of the interesting shifts in market sentiment we have been noticing during the past few weeks is an increase in demand for stable, dividend-paying stocks.
Yes, the big jump in technology stocks yesterday helped lift the S&P 500 up to new all-time highs, but most of the driving bullish momentum during the past few weeks has been generated outside of the Technology sector.
VZ is one of those stocks that has been consolidating higher and appears ready to break out to the upside. This is thanks in large part to its strong dividend yield of 4.47% and its strong fundamentals, which are driven largely by its stable user base.
If VZ can climb above resistance at $55, it will complete an “ascending triangle” bullish continuation pattern. It’s called an ascending triangle because, while the resistance level that forms the top of the consolidation range is horizontal, the support level that forms the bottom of the range is up-trending, or ascending.
When this breakout occurs, we anticipate the stock will climb up toward $57 — based on the $2 height of the current consolidation range and the breakout point of $55.
‘Buy to open’ the VZ October 19th $55 Call (VZ181019C00055000) for a maximum price of $0.58.
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