How AT&T Could Revisit the 2020 Low After Disappointing Earnings

AT&T is moving lower after reporting a top- and bottom-line miss. Here's what the charts for the stock say now.
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Shares of AT&T  (T) - Get Report were in the spotlight Wednesday as the stock bounces around following first-quarter earnings.

After rallying several percent, the stock was down about 1.5% on the day as the S&P 500 jumps almost 2%. The fact that AT&T isn’t getting hammered on the day may be good news for bulls, given that the company missed on earnings and revenue expectations.

Earnings of 84 cents a share missed analysts’ expectations by a penny, while revenue of $42.78 billion sank 4.6% year over year and missed estimates by more than $1.3 billion.

The earnings miss isn’t too concerning but that wide revenue miss isn’t comforting. AT&T is a bit harder for investors to digest than it used to be, though. That’s due to its large acquisitions, various businesses, coming streaming product with HBO Max, and heavy debt load.

Because there’s so much to consider, it’s reasonable to think that investors are still digesting the results and conference call, and trying to decide how they feel about it. The charts seem to confirm that thesis, with shares bouncing back and forth so far on the day. Let’s take a closer look at the charts.

Keep in mind, Verizon  (VZ) - Get Report is expected to report earnings before the open on Friday and could have an impact on AT&T stock later this week too.

Verizon is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells VZ? Learn more now.

Trading AT&T Stock

Daily chart of AT&T stock.

Daily chart of AT&T stock.

Above is a daily chart of AT&T stock, while below is a weekly chart. Both charts emphasize different levels of significance. For instance, on the daily chart, investors will notice the stock's inability to gain traction north of $31. That’s after shares broke below range support near $35, as well as the 200-day moving average.

Amid the pullback, bulls will want to see AT&T find support from the 20-day moving average and rising wedge support (blue line). Rising uptrend support on the daily chart comes into play near the 23.6% retracement, as shown on the weekly chart. Below this area would create concern for more downside, specifically to $27. Below $27 and a retest of the 2020 low at $25.63 is possible.

Weekly chart of AT&T stock.

Weekly chart of AT&T stock.

Also on the weekly chart, investors can see that, not only was $31 a difficult area of resistance for AT&T, but so where the 100-week and 200-week moving averages. Just above both of these marks is the 50% retracement. In order to see a sustainable move higher, AT&T stock will need to clear these marks, which sit between $31.50 and $32.

Here’s the bottom line: A break of uptrend support, the 20-day moving average and the 23.6% retracement puts $27 in play. A move back over $31 puts several notable resistance layers back on the table.