It has not been a good year for Verizon Communications Inc. After the election last November, shares of the telecoms provider rallied about 10% and hit a year-to-date high of $54.83 back in early January. Since that massive move, however, the stock has been on a landslide, dropping as low as $42.80 back in July. 

The decline was initiated mainly by Wall Street analysts downgrading Verizon (VZ) due to price competition from cheaper rivals such as T-Mobile US Inc. (TMUS​) and Sprint Corp. (S). Since hitting its July low, shares had been inching gradually higher, but then on July 27, Verizon reported better-than-expected earnings, and the stock took off, working its way back above its 200-day moving average of $48.36. Now that is what I call a decent size move.

Fundamentals have improved somewhat this quarter, and ever since Verizon's earnings win, shares have been in a nice consolidation pattern, trying to digest this 7% move, which is actually quite healthy. What also adds to the attraction of Verizon stock is its 4.8% dividend yield.

Chart source: TradingView         

I personally like to use the 200-day moving average, as indicate by the blue line on the chart above, to determine whether or not I go long or short on a stock. It keeps my technical analysis simple and is helpful in providing support and resistance for stocks. When prices are above the moving average, it can act like support, and when prices are below, it acts as resistance. The 200-day moving average can clearly help you decipher if you should stay with the stock or punt it. And while it weeds out a lot of noise, as with any other gauge, it isn’t foolproof.

The Bottom Line

I would like to see Verizon stock continue to consolidate in a sideways pattern for a bit longer and continue to hold onto its 200-day moving average of $48.36. If this does happen, then shares have the potential to break out to $50.90 and potentially higher. Place your stops accordingly.

For more institutional advice for the individual investor, please visit Allied Millennial Partners.

------------------------------------

Commentary Disclosures

This commentary is provided for information purposes only and does not pertain to any security product or service and is not an offer or solicitation of an offer to buy or sell any product or service. Unless otherwise stated, all information and opinion contained in this publication were produced by Allied Millennial Partners, LLC (AMP) and other sources believed by AMP to be accurate and reliable. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice.

All AMP employees, including research associates, receive compensation that is based in part upon the overall performance of the firm. AMP may have other financial interests in any given security with which this analysis suggests may be benefited from its conclusions. Investors should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Past performance does not guarantee future performance.

All content on this Site is presented only as of the date published or indicated, and may be superseded by subsequent market events or for other reasons. In addition, you are responsible for setting the cache settings on your browser to ensure you are receiving the most recent data.

Third-Party Comments on AMP’s Blogs

Third-party posts do not reflect the views of AMP and have not been reviewed for completeness or accuracy. Any inappropriate or offensive comments should be reported to robert@myampny.com

If you have questions or concerns regarding AMP’s Terms of Use, you can submit them to info@myampny.com

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.