Despite a strong stock market in 2017, AT&T ($T) is having a tough time with a breakdown in early May and a sharp decline below the 200-day SMA. The stock rebounded after a double-digit decline with a bounce back to the 200-day SMA, which is now falling. Thus, we can clearly say the long-term trend is down for this stock. Short-term, the rebound ended as the stock broke the wedge line and moved below support at 38.50. This signals a continuation of the prior decline and argues for further weakness, perhaps back to the November lows.
The indicator window shows the MACD Histogram on the verge of turning negative. This means that MACD is about to move below its signal line, which is the 9-day EMA of MACD. Keep in mind that MACD is based on exponential moving averages and moving averages lag. This is why we are seeing a breakdown on the price chart, but have yet to see the MACD Histogram turn negative.
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Thanks for tuning in and have a great day!
--Arthur Hill CMT
Plan your Trade and Trade your Plan
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