As investors hunt for value in the new year, one top technician says there’s something in the charts suggesting “Dow dog” Verizon is the best play for a catch-up.
Shares of Verizon have pulled back nearly 8 percent from their 52-week intraday high of $61.58 in November. However Worth believes the stock’s rebound off its 150-day moving average “has all the look of a bearish-to-bullish reversal.”
“What appeals to me is this check back to trend and the bounce,” he said. “The premise is the same you want to play for a catch-up.”
Worth’s charting also suggests that while the stock has given back most of its gains after breaking out from a bullish wedge formation, it’s also managed to establish support around the $53 level.
“What’s critical here is if you do break out to a 52-week high and then you were to fall back to the level from which you broke out you often get that pivot and then go again,” he said.
Shares of Verizon are up more than 1 percent so far in January and have risen nearly 23 percent from the 52-week closing low of $46.09.
“You have potential that the market has prospectively more absolute downside risk and/or relative with Verizon trying to narrow the gap,” Worth said. “I think it’s a great place to be on the long side.
Shares of Verizon were higher Monday afternoon at around $56.80.