On August 15th it became known that Berkshire Hathaway dumped its Verizon Communications, Inc. position and since then the stock has lost about 13.5%. While I do see this as an overall headwind for the stock it could be due for a bounce and looking over the monthly chart IF a bounce was to occur it would in the $39 area as we are about to test a very long term trend line. Typically a 3rd hit of a non-horizontal trend line will usually hold but I will not bag hold this position given the overall market weakness right now.
SL-38.50
SL-38.50
Comment:
If VZ hits $39 then it will have lost 25% in less than 3 months which is atypical for a stock like VZ (especially given the 6.43% dividend). Presumably Berkshire was selling its VZ position well before the Aug 15th news so the sell off, at this point, seems a bit overdone. Possible headwind-They just introduced a $30/month unlimited 5G plan which should be well received by cost conscious consumers.
Comment:
I don't like how the monthly bar peaked it's head below the lower trend line and did not have a HUGE reaction after hitting it. I really wanted to see it hit and make a strong reversal especially given the market was so bullish today! SL was not triggered so I've closed out this trade with a very small gain.
Comment:
We closed the monthly about 2.6% below the long term trend line...IMO this is not a safe stock but instead one that could continue to waterfall down in a capitulation event. It's still on my watchlist but the monthly close BELOW the long term trend line spells trouble right now.