Tuesday, February 7, 2017

T AT&T Monthly Chart; Negative Divergence; Double-Top

The DVY dividend ETF daily chart was posted previously. The DVY and SDP daily, weekly and monthly charts indicate that a multi-year top is likely forming as the weeks play out. Traders are always chasing into AT&T for its big dividend, however, the double-top, or M Top is ominous. Many investors jumped into T over the last couple months and now walk around with their chests puffed out bragging that they own the largest divvy-producing stock and will be safe in any downturn.

The monthly chart is topping out. The red lines show neggie d across the last decade, and the last few years, and over the last 8 months. The only sliver of strength is the money flow in the near term that is long and strong so this may create a jog move before T completely rolls over to the downside (down a week or two, then back up for a week or two, then roll over).

Price is elevated above the moving average lines needing a mean reversion. The volume has steadily moved lower over the last few years as the smart money passes off shares to dumb Joe Sixpack running into T because the guy on television said to buy dividend stocks.

If you ran into T thinking you were smart, you aren't. It is likely more prudent to scale back out of T going forward and do not go back in. It would not be surprising at all to see T at 26-32 in a year or two; maybe a lot faster if a market crash event occurs this year. Regardless, you can easily see on the monthly chart above there is no reason to buy T. Place your money in cash. Set more and more cash aside as time goes forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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