Wall Street is weighing in on telecoms this week.
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The stock market has picked a different winner this year. While AT&T has tumbled 22 percent in 2018, Verizon has added 9 percent.
Matt Maley, equity strategist at Miller Tabak, says AT&T’s charts show it is coming up against a tough roadblock.
“The stock has to bounce a lot more,” Maley said on CNBC’s “Trading Nation” on Tuesday. “It did try to make a double bottom down near the $29 level, but if you look at the long-term chart, it’s got to bounce a lot more before I’d really want to turn positive on the stock.”
AT&T has bounced around the $29 level since late October. It had not broken below that level since late 2011.
“It’s actually had a tough two-and-a-half years going back to the middle of 2016. It has not had a higher high since then. A move above $34 would give it that higher high, take it above its 200-day moving average and also take it above its one-year trend line. So until we get that kind of a move, even though it’s trying to make a bottom here, there’s no green flag on this one yet,” he said.
AT&T shares are a 13 percent rally from $34. They briefly traded above that level in early October but had not had a sustained stretch above there since April.
Stacey Gilbert, market strategist at Susquehanna, says AT&T’s long-term performance depends on the safety of its dividend yield.
“There’s a lot of concern, a lot of chatter that is it safe? Is it going to maintain itself? Do they have to cut?” Gilbert said on “Trading Nation” on Tuesday. “If AT&T were to maintain its dividend, this would be viewed positively. Obviously the flipside to that is if they cut it … the market is not pricing that in and that would definitely be a negative for AT&T here.”
AT&T has a dividend yield of 6.6 percent, nearly four times the 2 percent yield on the S&P 500. Verizon yields 4.2 percent.