Boston, MA 09/22/2014 (wallstreetpr) – Verizon Communications Inc. (NYSE:VZ) has pleased the markets by announcing iPhone specific deals which is expected to improve the margin of the company substantially. All the five sessions of the last week saw a very sharp rally from the low of $48.30 to the high of $50.38, higher than the high of the previous week. The weekly candle formation turned out to be nearly an Engulfing candle, implying a lot of bullish strength in the short term. The volume at 31 million has been exceptional too, especially when compared to an average volume of 13 million.
The investors must be aware of the fact that the stock is totally range bound for more than a year now and the band of $45-$54 doesn’t show any sign of breaking soon. Just the fact, that the current price is only 6.17% away from the 52-week high and 13.57% above the 52-week low, suffice to show the lack of any sustainable long term trending move but this period may be coming to an end now.
The area of $24-$26 has always been a major support zone for the stock in a long term basis. This area was tested in 2002 and after a rally till 2007, retested again in 2008, 2009 and 2010. From the 2010 low of $25.99, the current long term up move started which has been contained in a 4-year channel. The price touched the lower boundary at $45.85 in April 2014 and reacted upwards sharply. The current monthly low of $48.26 is almost on this trend line again and may have signaled the end of the year long consolidation. Obviously the bulls would need a confirmation in the form of a weekly close above $54 for a long term signal like that, but the positive divergences seen in the short term suggest an immediate rally towards $53-$54.
Investors could buy the stock at current market price or on any dip with a stop loss below $48.
