The shares of AT&T Inc. (NYSE:T) just moved above a short-term ceiling at the $14.40 level. Down 19.9% year to date, T is still within a chip-shot of its July 18, 30-year low close of $13.43. What’s more, it’s trading near a historically bearish trendline that could send it lower on the charts once again.
Per Schaeffer’s Senior Quantitative Analyst Rocky White, AT&T stock is now within one standard deviation of its 50-day moving average. In the past three years, the shares saw six similar signals, and were negative one month later 83% of the time, averaging a 4% loss. A move of comparable magnitude from its current perch of $14.72 would put T back much closer to the $14 mark.
Options traders emphasized calls over the last 10 weeks, and an unwinding of this optimism is likely to pressure the equity. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), T’s 50-day call/put volume ratio of 4.01 ranks in the 88th percentile of annual readings, which indicates a preference for bullish bets compared to the last 12 months.
Options look like the ideal avenue to pursue for those looking to speculate on AT&T stock, as it sports relatively cheap premium. This is per the equity’s Schaeffer’s Volatility Index (SVI) of 18%, which stands higher than just 5% of readings from the past year. What’s more, Trade Desk stock has a knack for outperforming options traders’ volatility expectations, according to its Schaeffer’s Volatility Scorecard (SVS) of 99 (out of 100).
It’s also worth noting that analyst sentiment is optimistic, and a shift could cause more headwinds to blow in. Specifically, eight of the 18 covering brokerages rate T a “buy” or better, and not a single “sell” recommendation is on the books.