Stock Of The Day: Will AT&T Break Out?

AT&T Inc. (NYSE:T) shares are trading higher on Friday despite weakness in the broader markets. The stock is at a resistance level, and it may be on the verge of a breakout, making it our Stock of the Day. As you can see from the chart below, AT&T was in an uptrend in August. But the trend ended around the $29 level. A selloff followed. When this happened, some of the investors and traders who bought shares around $29 began to lose money. At this point, they decided that their decision to buy was a bad one. They also decided to exit at breakeven if it was eventually possible. As a result, when the shares returned to $29 in September, these unhappy investors and traders were able to bail out at breakeven. Their sell orders created resistance at the level once again. A similar dynamic occurred in February and March. Remorseful buyers who purchased shares previously at $29 came into the market as sellers. This put a ceiling on the price once again. Many times, after reaching resistance, a stock will reverse and head lower. This happens when anxious and impatient sellers start to undercut each other so the buyers will come to them. This can turn into a snowball effect that pushes the price lower. If AT&T can get and hold above $29, it could be a bullish dynamic. It would mean that the large concentration of people who created the resistance with their sell orders is gone. New buyers must pay premiums to draw sellers back in. This is a ‘breakout', and it may be about to happen with AT&T. The ex-dividend date is the day on which a stock begins trading without the value of its next scheduled dividend payment. To receive a dividend, you must purchase the stock before this date. It is typically set one business day before the record date. Image: Shutterstock