AT&T(T) - Get Report is working on a four-day losing streak. Shares were off 1% Monday and are now down nearly 5% from last week's high. This steep pullback will likely carry shares lower in the near term, eventually driving AT&T back down to a major support zone. For patient AT&T bulls  a low-risk entry opportunity for this A+ rated stock is ahead.

Back in late October AT&T entered oversold territory. The stock remained under pressure into early November as well while continuing to hold major support near the $36 area. By mid-November AT&T began to perk up as a nine-day winning streak began. As the month came to a close it was clear the stock had left behind  an important bottom. AT&T continued higher throughout all of December, eventually stretching the rally off the October/November lows to nearly 20% and well into overbought territory.

The powerful downside pressure unleashed last Friday will continue to weigh on the action this week. AT&T investors should expect a re-test of the $40.20 to $39.50 area. This very solid support zone includes the stock's 200-day moving average as well as the November peak. A base here will allow the stock to work off its overbought reading, setting the stage for a fresh rally leg. On the downside a close back below $38 would clear the December low, indicating a much more prolonged bottoming process is ahead.

AT&T is scheduled to report earnings on Jan. 25.

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