Spurred on by more impressive earnings, the market continues its climb. The S&P, Dow, and Nasdaq Composite all hit new highs today as bulls celebrated corporate revenues and a housing market resurgence. According to data released this morning, 1.608 million new homes were built in the U.S. last month. December building permits contracted slightly, but overall; the new construction stats were very well received.
Many stocks – not just homebuilders – soared as a result. Some sectors even broke new ground. Take telecom, for example. The iShares Dow Jones U.S. Telecommunications Sector Index Fund ETF (NYSE: IYZ) reached a four-month high today, busting through key resistance in the process. Contributing to today’s telecom lift were CenturyLink Inc. (NYSE: CTL) – a stock we featured last week – and Verizon Communications (NYSE: VZ).
And though CTL’s ship may have already sailed after surging over 3% today, VZ remains within striking distance for short-term traders. In fact, VZ could still be a great “value pick” leading up to company earnings on January 30th.
In the daily candlestick chart above, you can see that Verizon’s been “stuck” chopping sideways since October. After rallying in mid-November, the stock sold-off yet again in mid-December while the rest of the market flourished.
Now, though, after having bounced off the lower Bollinger Band (BB), VZ’s on the rise. Today, shares broke out above the minor bearish trend (represented by the yellow trendline), suggesting that another recovery (like the one from November) could be arriving shortly.
However, unlike the November rally, VZ is short on time before earnings hit (1/30), meaning that if it’s going to make a move, it will likely do it quickly. With the stochastics indicator looking good (neither overbought nor oversold) and a double bottom (a common trend reversal formation) in the rearview mirror, it might make sense to go long on VZ above today’s high with a trade trigger of $60.40.
And even if the general market slows down – which it, admittedly, looks unlikely to do – VZ could still be a winner. It didn’t quite track equities in December. So, if the current bull run slows, VZ might still have enough “juice” to rally all on its own.
