AT&T (T) Chart – August 31, 2009

In honor of my first day of work at AT&T today, I’m posting a six month stock chart of T before it opens, after closing at $26.21 last week.  The Dow Jones component might have more downside coming in the near term based on this chart, but has a bullish angle worth watching.  The bullish part first – T is trading above its 10, 20 and 50 day moving averages and just saw a bullish crossover in the 10 and 20 day moving averages at the end of last week.  It’s been on a nice run since the first half of July and support seems to be rising from its current level around $25.50.  If support is found there, it could make another run at its line of resistance close to $27.00.  Keep watching that line.  It could be part of a rising wedge worth trading on soon.

The bearish part for me is lead by the Williams %R indicator.  Both the 14 and 28 day periods are losing momentum and breaking below overbought.  Confirmation on Monday and Tuesday of this break will be telling.  If it holds, the run north could continue a little longer.  Overall I’m leaning to the idea that T has more downside room to move than upside.  With $27.00 as a ceiling, that only leaves about 80 cents to the upside.  The downside could be all the way down to the lowest trend line of higher lows, close to $24.00 right now.  The more likely/closer target is around $25.00 right now.  That’s $1.20 below the current price.  $25.00 (no line drawn) is also the mark of previous support and then resistance and then support again.  I expect it to play a strong role again. 

I have no trade on T scheduled yet.  I haven’t followed it enough recently to know its patterns well enough yet, but I will be tracking it again now that they’ll be paying my salary again.  To make sure I don’t miss a ridiculously good move, I entered a trade trigger to email me if T breaks above $27.00 or below $25.50.  When T makes it above $27.00 I’ll consider buying calls, if not at least selling naked puts.  If T makes it down below $25.50 I’ll consider selling $25 strike puts if I can get $1.00.  That’ll give me cushion all the way down to the lower trend line I drew.