Telecommunications Services is listed as a Favored Sector in SIA’s Market Sector Report as this sector has remained consistently strong moving up 2 spots in the last month and 1 spot in the last quarter. This strength is predominantly attributed to the US Telco’s as the macro backdrop in this area is quite different than the sector headwinds being faced in this space here in Canada. As such, in today’s edition of the Daily Stock Report, we are going to feature AT&T Inc (T).
AT&T has shown consistent strength over the last little while moving up 1 spot in the last week, and 3 spots in the last month in SIA’s S&P 100 Index Report. It currently sits in the Favored Zone in the SIA S&P 100 Index in the #22 spot in the report. AT&T first entered the favored zone on September 10, 2024, at a price of $21.71. The shares dipped into the yellow zone briefly on a few occasions but maintained its positive SMAX score. At yesterday’s close, the shares are at $28.56 representing a 31.5% increase in a little under a year’s time and this does not even include its compelling annual dividend yield of 3.89%. In looking at the Weekly Candlestick Chart, we see the stock has been in a steady uptrend since initially bottoming in July of 2023. In the first week of April of this year, a bullish candlestick developed where the shares opened at the week’s low but finished the trading week near its week high. This is indicative of the buyers stepping in as market participants are viewing the week’s low price as fair value or an opportunity. In looking at a trailing 1 year timespan which almost coincides with when AT&T was given the green favored rating, AT&T is up +51.31% while the S&P 100 was up +18.36% representing a whopping 32.95% outperformance in this 1 year time period. This represents the power of SIA’s Platform in helping you identify the leaders in the market with its proprietary relative strength algorithm.
Support can be found at the $26 area and potential resistance can be found at the recent high of approximately $29.00 which is very close to the $30 psychological number.
In looking at a 2% scale on a Point the Figure Chart for an investment grade analysis, we see the shares have been in a very strong and steady pattern of higher highs and higher lows since its bottom in the Summer of 2023. A very short and mild sideways consolidation pattern emerged this past Spring between March and May when the overall market was experiencing uncertainty but overall held up extremely well during this time period. Most recently last month we see the shares had established a new upleg, breaking above April’s peak at $27.58 confirming the uptrend is still intact to this point. Resistance is at $30.45 based on a measured move. If it manages to break above this level, next resistance is at $32.96. To the downside, support is at its 3 box reversal of $27.04 and, below that, $24.98. With a SMAX score of 9 out of 10, AT&T is showing near term strength against all the asset classes and currently exhibits a bullish Double Top Pattern. AT&T is the third- largest U.S. wireless carrier, connecting 67 million postpaid and 17 million prepaid phone customers. Fixed-line enterprise services, which account for about 20% of revenue, include internet access, private networking, security, voice, and wholesale network capacity. Residential fixed-line services, about 10% of revenue, primarily consist of broadband internet access service. AT&T also has a sizable presence in Mexico, serving 20 million customers, but this business only accounts for 2% of revenue. The firm still holds a 70% equity stake in satellite television provider DirecTV but does not consolidate this business in its financial statements.
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