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AT&T (T) - Get Free Report is starting off this week on the right foot after ending last week on a down note. The shares are up 4.5% in Monday trading after the company reported earnings.

In early trading, AT&T technically hit new highs. At current levels, though, the shares are trading just under their former 52-week highs. Can the recent news push the stock above, possibly up to $40? It looks as if it can.

The third-quarter results were nothing to write home about, with non-GAAP earnings of 94 cents a share topping estimates by 2 cents. Revenue of $44.58 billion decreased 2.5% year-over-year and missed expectations by almost $500 million.

Given the news, AT&T is a worthy candidate as Real Money'sStock of the Day.

Management's fiscal 2020 outlook for both earnings and revenue came in ahead of expectations. Further, management has been making progress with activist investor Elliott Management. Investors are optimistic that the outcome of these talks will lead to a higher share price via buybacks and improving margins, along with other catalysts.

Do the factors also point to a higher share price? Let's look at the charts.

Trading AT&T Stock

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On Oct. 24 shares of AT&T stock took a hit, while the 50-day moving average stepped in as support. On Friday, shares the stabilized above this mark, as well as above range support.

This price action was a good sign for bulls as AT&T stock continued to consolidate its big gains. That said, earnings would make or break the chart setup, as is usually the case. 

In this instance, we have a bullish reaction to the news, and with T stock making new highs, it's possible for it to continue even higher. As the shares run into channel resistance near $38.75, it could make it tough for bulls to push shares higher in the short term. 

If T stock is robust enough, though, it will break out over this channel-resistance mark, potentially rallying to $40. Even if resistance holds steady, all hope is not lost. As long as AT&T can maintain above former range resistance between $38 and $38.22, the setup still looks bullish.

Below $38 and AT&T stock may fill the post-earnings gap down toward $37.

So what's the play from here? See that shares hold up over $38. Above could eventually send AT&T stock up to $40 or higher. Below $38 and the setup is certainly less bullish. A break below the 50-day moving average would be concerning.

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