Time to call up AT&T (T) on your trading screen.

AT&T has been anything but a leader lately -- shares are down almost 10% since the calendar flipped to 2017, under-performing the rest of the broad market by a big margin. But AT&T is finally showing signs of a reversal this summer, and it could mean that this big telco is about to make up for lost time.

AT&T's stock has spent the last month and change forming an inverse head-and-shoulders pattern, a bullish reversal setup that indicates exhaustion among sellers. The pattern is formed by two swing lows that bottom out at approximately the same level (the shoulders), separated by a lower low (the head). The buy signal comes on a move through AT&T's neckline at $38.75, a price tag that was just hit on Friday.

Price momentum, measured by 14-day RSI, seen up at the top of AT&T's chart, adds some extra confidence to the price pattern. The higher lows in RSI mean that buying pressure has been building at these lower price levels.

Once the stock materially moves through $38.75, buyers are back in control.

Source: TheStreet
Source: TheStreet

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

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