Like a lot of high dividend paying stocks and closed-end
funds, AT&T is just not acting well these days. Its relative
underperformance to many other stocks and its benchmark has been very
apparent recently as the stock continues to struggle below its 200 day moving
average. Needless to say, this type of underperformance should put it on traders short radar.
The bear flag just below the 200day moving average looks
very similar to the bear flag below its 200day during the summer of 2011. Back
then, the stock failed after a headfake close over the 200day and fell a quick
10% before recovering. The action since the October high seems very similar.
The stock got hit hard off its highs and fell right to its 200day. Now its in a
bear flag just below the 200day as the 50day comes down to cross the 200day...any day now.
Aggressive traders may want to enter a short here and look
to cover near or below $32. Although I am looking for a repeat of the action
from 2011 into year end, watch volume and price for hints of a change in
direction as a close over its most recent closing high near $34.75 will get it
moving higher again.
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