Shares of the country’s two largest telecom companies are uncharacteristically volatile as they report second-quarter earnings.
On Thursday, Verizon shares fell 2.9% in sympathy with AT&T’s earnings sell-off. While AT&T beat earnings expectations, full-year free cash flow guidance disappointed investors after cutting it to $14 billion from $16 billion.
This morning, Verizon expressed its disappointment, too. Shares fell more than 7% in the report, as earnings missed expectations and the company lowered its earnings forecast.
For what it’s worth, Verizon stock is also down 1.5% on Monday and 2.75% on Wednesday. Now Verizon stock is down for the fourth session in the past five years and has lost about 14% this week — double its worst weekly performance since March 2020.
This would also mark the stock’s biggest one-week decline since October 2008.
But don’t worry, bulls: the support may not be too far away.
Verizon stock trading
Verizon stock this morning looked like an opportunity, especially if it opened below $45.55. That was the lowest in May and the lowest in 2022 so far this year.
Go to follow
If Verizon’s stock breaks below that level or opens below that level and recovers, the bulls could get a long run at reasonable risk.
Instead, keep going down.
On the positive side, Verizon is now trading down to the 200-month moving average. This procedure has not been tested since 2015, but at the time it was a very solid support.
I want to see Verizon hold above the $44 level. If Verizon can do that and bounce off the 200-week moving average, a return higher through $45.50 could be attractive to the bulls.
That may open the door for the 10-day moving average as its first test of active resistance. Ultimately, it could put two levels to fill the gap, at $46.68 and $49.
But make no mistake with the graph: this is not a good look.
There is no bullish divergence in the RSI reading and Verizon stock is freely retreating to new 2022 lows.
If it can find a foothold, great. But just like Snap (Explode, Explode) – Get a Class A report from Snap Inc.The charts are a bit off at the moment, although Verizon looks a lot better than Snap and has a roughly 6% return to boot. (And don’t forget that Verizon has now increased its dividend payments for 15 consecutive years.)
If Verizon can hold the $44 level and the 200-month moving average, the bulls may find something constructive to work with. Otherwise, let’s give this more time.