Stock of the day: Verizon

The new week starts with this analysis of Verizon, which we already analysed here at the beginning of February. Back then, we were one step from a major buy signal as the price created an inverse head and shoulders pattern. All we missed was a breakout of the neckline:

“If VZ breaks the neckline, the next resistance will be the green down trendline, but I guess it should be a formality, and buyers should not have problems with that one. Alternative to the positive scenario is the price bouncing off the blue area and further slide, which would cancel the iH&S pattern. I guess that option is currently slightly less probable.”

We wrote that when the price was around 53,7. At the beginning of March, buyers managed to pull the price higher to around the 55.3 level, but that was it. The price reversed after touching its first resistance – the long-term down trendline (green).

Since then, we have a drop, which is really clear from a technical point of view. The whole bullish correction was shaped like a wedge (red). After bouncing from the main down trendline (green), the price went lower and broke the lower line of the wedge. That, in theory, cancels any positive sentiment here and brings us a legitimate sell signal. Chances for reaching new long-term lows are very high.