On Wednesday, Verizon delivered a solid earnings report and raised its guidance.
The stock gave us three reasons to be buyers: A bullish reaction to earnings, a near-5% dividend yield and a low to trade against.
Can we say the same thing about AT&T?
The stock was rising slightly in premarket trading after investors seemingly liked what the company had to say when it reported earnings before the open on Thursday.
However, the stock is now down 1% on the day and at its session lows.
That’s despite the company delivering a top- and bottom-line beat, even though revenue declined year over year.
With a dividend yield of about 8% and a recent breakdown of its own, is AT&T stock a buy too?
Trading AT&T Stock
As an investment, AT&T may be worth a deeper inspection. It's planning to acquire Discovery (DISCA) - Get Discovery, Inc. Class A Report and spin off its streaming business, which includes the powerhouse HBO.
Amid the spinoff, the company also plans to cut its dividend down, although it will still boast a solid yield.
Figuring out those valuations is a job for investors. As traders though, there’s not a lot to love here. Forget the dividend cut, the complexity of an acquisition and a spinoff. We can boil our reasoning down on just the technicals alone.
Shares plunged lower in mid-May after the Discovery announcement, before falling into a painful downward channel (blue lines). Eventually, support gave way and AT&T plunged below the COVID low at $26.08.
AT&T stock tried to reclaim this level the day before earnings but was rejected. The same thing happened after earnings.
Now we have to wait.
Back over $26.08 could open the door to the $26.80 area, followed by the 50-day moving average.
On the downside, keep an eye on the low at $25.01. A break and reclaim of this level could give us a long entry, particularly if there is some divergence on the Williams %R reading.
However, the bottom line is simple: I’m biding my time with AT&T and giving it time to either firm up and move higher or move lower and give us a better entry.