The new 52-week high list has been pretty scarce as of late, but Verizon Communications Inc.'s (VZ) earnings announcement propelled its stock above an important level of resistance to 17-year highs, signaling that further upside may be be ahead.

Below is the daily chart of Verizon, showing a choppy five-year range in the stock between $42 and $56. Prices have been flagging tightly at the top of this range for the better part of three months and have now gapped up and closed above the 2016 highs at $56.50. With momentum in a bullish range and the 200-day moving average rising, the positioning of this gap suggests that it is a breakaway gap and that a new uptrend is beginning.

Daily technical chart showing the performance of Verizon Communications Inc. (VZ) stock

If this is a breakaway gap, we want to see prices show immediate follow-through or at least consolidate at current levels, with little to none of the gap below being filled. With that said, as long as prices are above $56.50, we can be long with an initial upside target near $65.

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I know it's only Tuesday, but I'm using this weekly chart to provide some context around this move. The stock has gone essentially nowhere for the past 20 years, but if this breakout holds, then prices are likely to retest their 1999 highs near $69.50 over the intermediate or long term.

Weekly technical chart showing the performance of Verizon Communications Inc. (VZ) stock

In addition to its action on an absolute basis, Verizon is also breaking out to 18-month highs relative to the Dow Jones Industrial Average as momentum moves firmly into overbought territory.

Technical chart showing the performance of Verizon Communications Inc. (VZ) stock vs. the Dow Jones Industrial Average

This base in this ratio formed right at the 161.8% extension of the 2010-2013 counter-trend rally, and conditions suggest that there's another 13% of upside before potential resistance at former support comes into play.

The Bottom Line

In this challenging market environment, we continue to see rotation into the more defensive areas of the market like large- and mega-cap telecom, utilities and healthcare. Verizon is breaking out on an absolute and relative basis and has a 4.40% dividend yield to boot, suggesting that it may continue to be the beneficiary of money flows if equity markets in the U.S. and around the globe continue to struggle.

If prices are above the 2016 highs of $56.50, the reward/risk in Verizon is very much skewed in favor of the bulls.

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