T is highly leveraged on debt after acquisitions. There has been an expressed effort to pay down this debt and improve the debt to earnings ratio, but there is still a lot there. This makes T vulnerable to economic factors turning against them. Interest rate hikes would hurt them a lot (These seem unlikely), and a drop in the economy troubling earnings can sting them hard.
Alongside it's debt pile, T has various cash flow obligations. Paying a high dividend seeps money out of the company and upgrades to take advantage of 5G technology will be expensive. It's a delicate balancing act. Walking of a tightrope, and this will not stand up too well if it starts to get windy in the markets.
From a technical viewpoint, T is already weak and has been in a range for a while. This looks more like it has been a consolidation pattern than the start of a recover. Another leg breaking the low seems more probable than it continuing much higher than the established range. If this breakout happens, we should watch for a butterfly pattern to give signs to take profit and consider long positions.
Swing Trade : Sell T 38.30. Stop Loss 44. Target 10.
If this move starts to happen, I will post additional short term trades to follow the momentum through days/weeks
Alongside it's debt pile, T has various cash flow obligations. Paying a high dividend seeps money out of the company and upgrades to take advantage of 5G technology will be expensive. It's a delicate balancing act. Walking of a tightrope, and this will not stand up too well if it starts to get windy in the markets.
From a technical viewpoint, T is already weak and has been in a range for a while. This looks more like it has been a consolidation pattern than the start of a recover. Another leg breaking the low seems more probable than it continuing much higher than the established range. If this breakout happens, we should watch for a butterfly pattern to give signs to take profit and consider long positions.
Swing Trade : Sell T 38.30. Stop Loss 44. Target 10.
If this move starts to happen, I will post additional short term trades to follow the momentum through days/weeks