Home Stock Markets AT&T Stock Chart: Buy or Sell After Cash-Flow Outlook Disappoints?

AT&T Stock Chart: Buy or Sell After Cash-Flow Outlook Disappoints?

by WOOWinvest
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AT&T Stock Chart: Buy or Sell After Cash-Flow Outlook Disappoints?

AT&T (T) – Get AT&T Inc. report Can’t seem to rest. The stock fell more than 7% on Thursday after the telecom giant reported earnings.

On the upside, shares have bounced back nicely from their 11% slump. Still, this is not what the bulls were hoping for.

The company posted a second-quarter profit and reiterated its full-year profit guidance. AT&T even raised its mobile revenue guidance, now calling for 4.5% to 5% growth.

So what went wrong?

In that guidance, AT&T also cut its full-year free cash flow guidance by $2 billion to about $14 billion. For a company so reliant on its cash flow and what it means for its dividend, this isn’t news that bulls want to hear.

As the company’s spin-off, Warner Bros. Discovery, the mood is especially bad (WBD) – Get Warner Bros. Discovery Inc. Reporthas been doing very badly since their split on April 11.

Shares of Warner Bros. Discovery have fallen more than 40% since then, but as far as AT&T stock is concerned, there’s actually a silver lining on the charts. Let’s see it.

Trade AT&T Stock

A daily chart of AT&T stock.

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What does the split date (April 11) mean relative to today’s AT&T stock? It left a large unfilled gap down to $18.30.

With this morning’s dip, that gap has now been filled. Not only did the stock fill the gap, but it also bounced off uptrend support (blue line).

More importantly, take a look at where the stock opened on April 11 and where it became support after Warner Bros. found a spinoff. That level would be $18.80, an important support in April, May and June.

In other words, AT&T stock finally filled the gap down to $18.30, reclaimed important post-split support at $18.85, and is now looking for further direction.

If the stock declines at $18.80 as support, the post-earnings low will technically revisit around $18.24. Below this value and a low of $17 is likely.

On the upside, let’s see if the stock can reclaim the 200-day moving average. If it can do that, AT&T stock can start filling the gap, recovering to $20.40.

Along the way, some important areas could include the 50% to 61.8% retracement zone between $19.32 and $19.57, and the descending 10-day moving average.

While investors are generally accustomed to reducing volatility in stocks like AT&T, some traders can take comfort in the way it trades because it has shown very technical price action lately.

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