AT&T Stock: A Sleeping Giant Ready to Explode
Monday, October 14, 2024
Ryan Brooks
Monday, October 14, 2024
Monday, October 14, 2024
AT&T, long considered a staple in the telecommunications sector, is showing signs of being a sleeping giant on the verge of an explosive move to the upside. After a solid run in recent weeks, technical indicators suggest that this momentum may be more than just a short-term blip. In fact, the intermediate-term outlook for AT&T looks quite strong, presenting a potential opportunity for investors to take advantage of a sustained uptrend.
Chart Breakdown: Eyeing a Breakout
In the chart, AT&T stock is currently consolidating within a tightening wedge pattern, marked by converging support and resistance levels.
This wedge often acts as a setup for explosive moves in either direction, and in this case, the technicals suggest an upward breakout.
As seen in the image above, the price is nearing the lower range of the wedge, bouncing off support around $21.
This support level has been tested multiple times and has held firm, indicating a solid foundation for upward movement.
If AT&T breaks above the resistance level near $22.50, the stock could experience a powerful move higher.
The upside target could be in the $23.50 to $24 range, aligning with historical resistance levels.
Earnings as a Potential Catalyst
With earnings around the corner, AT&T has the potential for a major catalyst.
Earnings reports often bring heightened volatility and can trigger significant stock price movements. If AT&T delivers strong results, this could fuel the breakout above the wedge pattern, sending the stock much higher in a short period.
Intermediate-Term Strength
The technical outlook for AT&T also remains strong on the intermediate-term horizon. The moving averages continue to show a steady uptrend, confirming that the stock's momentum is still intact. Despite the recent consolidation, this trend indicates that the stock remains in a bullish trajectory overall.
Targeting the $21 Strike for AT&T’s December 2024 Options
The $21 strike price for the December 20, 2024 expiration stands out as a compelling target for me.
Why the $21 Strike?
The $21 strike option currently trades with a bid of $1.12 and an ask of $1.16, making it attractively priced given the upside potential in AT&T stock.
The stock is showing signs of a near-term move higher, and with solid technical support around $21, this strike aligns well with a bullish outlook. This is especially relevant considering the stock's current price action near support, which strengthens the probability of a bounce.
The key here is that this option offers a way to gain leveraged exposure to AT&T’s stock at a relatively low cost.
If the stock breaks out and moves closer to the $23 or $24 price targets highlighted in the technical analysis, this option could see significant appreciation in value.
For those looking to maximize returns with a defined risk, the $21 strike provides a favorable risk-to-reward ratio.
Additionally, with volume starting to pick up on this option, we’re seeing an increase in liquidity, which is always a positive sign for traders entering new positions.
With earnings on the horizon, this option could benefit from a surge in implied volatility, which often rises ahead of key events like earnings announcements.
This adds to the potential reward, as a breakout in the stock coupled with increased volatility could rapidly drive up the value of this contract.
Investors looking for a bullish play on AT&T should keep an eye on this $21 strike price for December 2024.
It offers a low-cost way to capitalize on a strong technical setup and potential earnings-driven catalyst.
Conclusion
AT&T’s stock chart, combined with its upcoming earnings report, signals that this could be a prime moment for investors to pay attention.
The stock is poised for a potentially huge move to the upside as it gears up to break out of the wedge pattern. Keep an eye on AT&T’s earnings results as they may act as the spark that sends this sleeping giant surging to new highs.
This technical setup, paired with solid fundamentals, makes AT&T a compelling investment opportunity in the near term.
Thanks for reading!
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Ryan Brooks
Hi, Ryan here...
As the writer for FindBetterTrades, I’m passionate about breaking down complex trading strategies into actionable insights, helping traders of all levels navigate the markets.
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