NEW YORK (TheStreet) -- Are flips only for pancakes?

No. A flip from resistance to support (or vice versa) can be a strong indicator of coming price action.

Why is this? When the trading range flips, the tendency is for the new border to have greater strength than the previous border. For example, on the chart of AT&T (T) - Get Report, resistance flipped to support and then back again, all within the last six months.

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The latest flip occurred right after last week's volatile sessions. While this set up a flip to resistance, the stock price has not recovered from the marketwide price decline. In fact, AT&T remains depressed and several signs point to a bearish trend.

The big decline formed an exceptionally strong bearish engulfing signal. This by itself is not significant except for the size of the second, long black day, which only strengthened the bearish signs.

The relative strength index gave an oversold reading only briefly but has since returned to the middle of the index, indicating that current price levels are "normal" in terms of momentum.

Another big signal was seen in the moving average convergence divergence trend. This moved into bearish territory in a late July crossover, well before last week's debacle. Both averages have remained below the signal line and declined further.

All of these signs point to a bearish trend, at least in the short term.

AT&T continues to appear to have strong fundamentals. The dividend yield is 5.66%, and the company has raised dividends every year for the past decade.

Revenue rose in nine of the last 10 years and earnings rose in six of them. The debt ratio was 45.5 at the end of the latest reported fiscal year, up gradually over 10 years from 32.3.

In this uncertain market, many opportunities appear in stock options.

Given the bearish signals for AT&T, the September puts are at bargain prices, especially if you expect further price declines.

The Sep 33 put reported this morning with an ask of 0.84. Adding 0.09 for trading, costs, this put can be bought for 0.93, or $93. The Sep 32.50 had an ask on 0.61; after trading costs, this one costs $70.

Both of these puts expire in 16 days, but they are attractive at these prices. The strikes are in close proximity to current price levels, and very little time value remains.

Given the unavoidable risks of any long option position to expire in the near future, the long puts for AT&T could represent an acceptable risk for those traders who agree that the signals are bearish.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.