Verizon Communications Inc VZ gapped down about 4% to start Friday’s session and continued to slide almost 3% intraday after printing a third-quarter earnings beat.
For the quarter, the New York-based company lost 189,000 monthly subscribers after hiking charges to include additional fees in June, which may have contributed to the bearish reaction.
Those customers likely migrated to competitors such as AT&T, Inc T and T-Mobile US, Inc TMUS. As a result, Verizon fell to decade lows, dropping the relative strength index (RSI) in to oversold territory.
The Verizon Chart: Verizon reported revenue of $343.24 billion, which beat the $33.78-billion consensus estimate, and reported earnings per share of $1.32, beating a consensus estimate of $1.29.
The stock has been trading in a downtrend since June 24, making a very consistent series of lower highs and lower lows. The most recent lower high was formed on Oct. 18 at $37.60 and the most recent confirmed lower low was printed at the $35.04 mark on Oct. 13.
- On Friday, Verizon was working toward printing its next lower low within the pattern, but there aren’t signs yet the next bottom is in. Bullish traders can watch for a bullish reversal candlestick to eventually form, such as a doji or hammer candlestick, to indicate a bounce is on the horizon.
- Bearish traders who aren’t already in a position may choose to wait for the next lower high to print. When Verizon eventually reverses and trades higher, the stock may form a bearish reversal candlestick near the upper range of the gap that was left behind on Friday, between $35.70 and $36.55.
- A bounce is likely to come over the next few trading days because on Friday, Verizon's RSI hit 29%, which can be a buy signal for technical traders.
- Verizon has resistance above at $35.05 and $36.46 and support below at $33.36 and $32.20.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.