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Is Wall Street Hanging Up On Verizon After Yahoo Deal?

Is Wall Street Hanging Up On Verizon After Yahoo Deal?

It’s certainly been an eventful week for Verizon Communications Inc. (NYSE: VZ). The company kicked off the week by announcing that it has agreed to buy Yahoo! Inc. (NASDAQ: YHOO) for $4.8 billion. Verizon then reported mixed Q2 results, including an earnings beat and a small revenue miss.

The stock has been one of the hottest large caps in the market in 2016, delivering a 19.1 percent year-to-date gain on top of its generous 4.1 percent dividend. However, after hitting a new 15-year high of $56.38 at the beginning of the month, Verizon has drifted mostly sideways in recent weeks, while the S&P 500 went on to hit new highs.

Related Link: Apple Is Right Back Where It Was 3 Months Ago

On Wednesday, the stock briefly dipped as low as $54.44 before quickly rebounding to slightly above $55. Verizon has spent most of July in a narrow trading range between $55 and $56. Wednesday’s dip could be a sign that there are buyers below this range, but any attempts to break out to new highs have been met with selling pressure as well.

Traders should watch for high-volume breakouts above $56 or below $55 for an indication where the stock is headed in coming weeks.

This year has been kind to the stocks of all of the “big four” wireless providers. T-Mobile US Inc (NASDAQ: TMUS) is up 16.7 percent, AT&T Inc. (NYSE: T) is up 23.6 percent and Sprint Corp (NYSE: S) is up an impressive 61.3 percent.

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Disclosure: The author holds no position in the stocks mentioned.

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