UK-based telco BT Group ( BT) looks a little more bullish right now -- and you don't need to be an expert technical analyst to see why. Shares of BT have been trading in an uptrending channel since the start of last summer. That tight range for shares continues to be significant as another summer approaches.
The trend line support and resistance levels give us a high probability range for BT to trade within. And as you might expect, the ideal time to be a buyer is on a bounce off of support. When you're looking to buy a stock within a trend channel, buying after a bounce off of support makes sense for two big reasons: It's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). That means that buyers would do better to wait for BT to correct from here before jumping in.
At first glance, the abundance of gaps in BT's chart makes it a little tougher to read -- but you can ignore them. Those gaps, called suspension gaps, occur because BT's shares trade off U.S. hours on the London Stock Exchange. From a technical standpoint, they're not significant.