Don't Ignore This Chart!

VZ Calling Home?

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On the weekly Relative Rotation Graph holding the Dow 30 stocks, we can see Verizon (VZ) shooting from the improving quadrant towards leading.

The RRG below shows VZ in isolation. It is hard to see as the move went very fast, but, since mid-July, VZ has completed a rotation from lagging into improving, then back into lagging and into improving again.

Over the past 3-4 weeks, the tail on VZ started to get longer. The RRG-Heading remains strong (almost 45 degrees) and VZ is now about to cross over into the leading quadrant.

In particular, when we bring the price chart of VZ (as seen at the top of this article) into the equation, VZ really becomes a stock to watch.

At the end of 2018, a high was formed just below $60. That level was tested again twice in the first six months of 2019, creating a strong horizontal resistance level. The opposing lows over that period of time all came in at higher levels, creating an ascending triangle which usually resolves to the upside.

Buyers are willing to get in at higher prices, as indicated by the higher lows, while sellers continue to provide supply at the horizontal level. When supply dries up and demand continues to come, that resistance level is broken and prices usually continue higher.

At the moment, that triangle is in the process of being broken to the upside, signaling a strong possibility for a further rise in prices for VZ.

It is likely further improvement of relative strength will be a result as well.

-Julius



My regular blog is the RRG Charts blog. If you would like to receive a notification when a new article is published there, simply "Subscribe" with your email address.

Julius de Kempenaer

Senior Technical Analyst, StockCharts.com

Creator, Relative Rotation Graphs

Founder, RRG Research


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Feedback, comments or questions are welcome at Juliusdk@stockcharts.com. I cannot promise to respond to each and every message, but I will certainly read them and, where reasonably possible, use the feedback and comments or answer questions.

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RRG, Relative Rotation Graphs, JdK RS-Ratio, and JdK RS-Momentum are registered trademarks of RRG Research.

Julius de Kempenaer
About the author: is the creator of Relative Rotation Graphs™. This unique method to visualize relative strength within a universe of securities was first launched on Bloomberg professional services terminals in January of 2011 and was released on StockCharts.com in July of 2014. After graduating from the Dutch Royal Military Academy, Julius served in the Dutch Air Force in multiple officer ranks. He retired from the military as a captain in 1990 to enter the financial industry as a portfolio manager for Equity & Law (now part of AXA Investment Managers). Learn More
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