It was a big year for “boring” blue chips.

For instance, a whopping 63 hefty S&P 500 components managed to deliver returns of 50% or more in 2019. That's staggering.

There are also good reasons not to discount the upside potential in some of the biggest stocks in the major indexes as we get deeper into 2020.

Case in point: AT&T (T) - Get Report.

AT&T is gearing up for earnings at the end of the month - when the telecommunications and media company reports its numbers in a week or so, analysts are looking for earnings of about 87 cents a share. But the real story in AT&T is taking place right now in the price chart.

To figure out how to trade it, we’re turning to the chart for a technical look:

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At a glance, AT&T has been a great example of an outperforming blue-chip name: Shares have posted total returns of 31.4% in the trailing 12 months, beating the rest of the S&P 500 in the process. But shares haven’t made much progress since this past fall, when this stock put in a high right around $39.

On the surface, it might look like AT&T’s momentum is stalling. But that sideways grind in shares over the past several months is actually setting the stage for a meaningful move higher.

AT&T is showing off a pretty textbook example of an ascending triangle setup, a bullish continuation pattern that signals higher ground ahead. The pattern is formed by horizontal resistance - at that aforementioned $39 price ceiling - and uptrending support to the downside. Simply put, as AT&T bounces in between those two technically significant price levels, shares have been getting squeezed closer and closer to a breakout through $39.

If shares can manage to catch a bid above that $39 price level, then we’ve got a clear signal that the excess supply of AT&T’s stock above that level has been absorbed and buyers are back in control.

Relative strength points to outperformance in AT&T as well. This stock’s relative strength line has been in a shallow uptrend since last May, indicating that shares have been systematically outperforming the broader market over that stretch. This week’s test of that trendline level puts AT&T on track to resume outperforming again in January.

At this point, it makes sense to wait for the $39 level to get taken out before jumping into the AT&T trade. With earnings looming, there’s a solid chance that a beat later this month could be the catalyst that brings shares over that hurdle. 

That makes AT&T a name to keep on your radar in the sessions ahead.