1T trade ideas
At&T - Key support levelT will rebound on key support level, target 39 USD
AT&T added 300,000 subscribers to its DirecTV service, but at the same time, the company lost 390,000 subscribers for its other TV offerings. That means it lost 90,000 subscribers on a net basis.
The market reacted very negatively to the news, sending AT&T's shares below $36, which means the shares were down 9% during the last week.
The fact that AT&T is losing subscribers isn't a positive at all, obviously, but I don't think the 90,000 subscribers lost justifies such a negative share price reaction, due to two reasons.
First, the company has been losing subscribers for a while now, and when we take a closer look, we see that the decline rate has slowed down a lot:
Q3'17: Total - 90,000, Traditional - 390,000, Now 300,000
Q2'17: Total - 199,000, Traditional - 351,000, Now 152,000
Q1'17: Total - 233,000, Traditional - 233,000, Now 72,000
Q4'16: Total - 240,000, Traditional - 27,000, Now 267,000
The decline rate has dropped from almost a quarter million one year ago to less than 100,000 a quarter now, with the net total getting closer to zero every quarter.
AT&T's video offerings make up roughly 20% of its total revenues ($36 billion annually out of $162 billion), and the company has about 25 million subscribers - that number thus dropped by 0.4% during the most recent quarter.
Up or down?This is either a double bottom swing or a double top failure. If it gaps up tomorrow it could be a nice swing trade back to 37 or if it gaps down it could go to 33.
Set buying and selling point on several points on trend linesAs title, keep in mind to set stop loss strategy.
hold AT&T for couple yearsProbably correction of the wave 2.3 is finished since all required targets were achieved. There is one possible targets below is 33.72, but it is small probability to achieve it. The target of the 3th wave is about 59$.
WAITING FOR THE CANDLE SIGNAL IN FURTHER DAYS.Waiting fot the candle signal.
A Hammer with a long tail is ideal.
The next area for take profit is 61.8 fibo retracement of the previous downtrend movement.
AT&T Buy IdeaW1 - Range
H4 - Price broke above the swing high at 39.35.
Scenario 1 - One more wave down then buys with TL breakout.
Scenario 2 -
H1 - Most recent high and TL was already broken up. We can go long as long as last low around 37.95 is holding. We can wait for another small correction and trend line to be created, and wait for a breakout to enter.
M 15 - Could it push from this level - Yes, most definitely. But it never hurts to be conservative.
AT& T - Buy At $37-$37.50Per Seeking Alpha/ 7/3/17
Summary
This weekend two major moves by the company suggest that the merger is a done deal.
We discuss the management changes and the major debt taken on.
A discussion of earnings shows strong expense management and rising expectations for the future.
AT&T (NYSE:T) has just made two major moves this weekend that you need to be aware of as it prepares for a merger with Time Warner (TWX). First it is shaking up management. Second, it is finalizing this year's largest corporate bond sale. Both of these moves suggest that this merger is a done deal and the government's blessing at this point is just a formality. With these types of moves, especially the financing move, you can rest assured management knows it is in the clear on this deal. Although I have always said we need to analyze the company and future expectations under the assumption that the deal would not close, having this vote of confidence that the deal will close is bullish in my opinion. Let us discuss these two moves.
First, management is being moved around to prepare for the on boarding of Time Warner under the AT&T umbrella. Effective tomorrow (August 1) Chairman and CEO Randall Stephenson announced three major executive changes. First, Lori Lee who is Global Marketing officer will take over leadership of AT&T International. This move is important as international sales are an ever growing source of revenues for the company. In addition, Ms. Lee was the lead of the merger planning team. The second move is the appointment of John Stankey to take on the lead of the Time Warner integration team, and in this role he will work with Time Warner CEO Jeff Bewkes to plan for a transition of Mr. Bewkes to assume lead of AT&T's new media company post-merger. Finally, John Donovan, who was Chief Strategy Officer of AT&T Technology and Operations, will become CEO of the new AT&T Communications segment, which is comprised of AT&T's Business Solutions, Entertainment Group, and Technology group.
Second, we learned this weekend that AT&T is now seeking financing presumably to pay for this merger. This is a serious on-boarding of new debt. While the merger is costing in the ballpark of $85 billion, AT&T is looking to raise $22.5 billion through a seven-tier bond offering according to a Financial Times Piece. Evidently investors had piled in orders to the tune of $63 billion to get in on the bond offering. According to the article: "the sale was to include notes with maturities ranging between 5.5 and 41 years, with yields on new 10-year debt set to price 160 basis points above benchmark Treasuries". This is a serious amount of cash being raised for an already debt laden company.
Covered Straddle on TT stock has earnings July 25 after the bell and the current implied volatility is inflated. Can current stock owners profit from selling premium before earnings?
What if the investor is willing to acquire more shares if the stock falls to the put strike and willing to sell shares held if the stock price rises to the call strike?
Last price of of 36.52
Implied Volatility is 20.9
28 Days to Aug 18 Expiry
1 Standard Deviation range 34.4 - 38.64 which implies an expected range of +/- 5.79% by expiry.
The current stock price is right in between the straddle strikes so you'd need to choose depending on if you're bullish or bearish on the stock currently.
The 37 straddle credit is $1.57 or 4.3% of last price for break even at 35.43 and 38.57.
The 36 straddle credit is $1.63 or 4.46% of last price for break even at 34.37 and 37.63.
An advantage to selling the straddle is right now the $37 strike volume is higher and more liquid.
A disadvantage to selling the straddle is the narrower breakevens and lower probability that the stock price is between the breakevens by expiry (about 50%).
The straddle can however be managed early at 25% of the initial credit for a higher probability of success.
The 34-39 strangle (about 12 delta) gives a credit of 25c (a paltry 0.68% of last price) for breakevens of 33.75 and 39.25. This is outside the range of the expected move.
The 35-38 strangle (about 22 delta) gives a credit of 53c (1.45% on the a T price of 36.52) for breakevens of 34.75 and 38.53. This is just inside the range of the expected move.
The 20 delta strangle credit would yield an annual rate of 12%+ if sold 8 times a year.
An advantage to selling the strangle is the wider breakevens and higher probability of success that the stock price is between strikes by expiry and the investor keeps the whole credit.
More info on the covered straddle strategy:
www.fidelity.com
T short term PAIN long term GAINZ Bullish divergence on MACD
GAP Up
Broken down trend
Higher High
Would like to see a retest of lows or top gap
ATTSo I have notice whether the estimates were made,missed, or spot on the stock price seems to move on its own. I did by the stock because of the low price on bad news, i believe over reaction by the big players. Over the last 5 days the stock has had a sell off @ 10:00 am. No doubt the big boys selling off. I have also seen buying in smaller lots. Lastly the 4:30 hour 2.3 million shares were purchased just prior to the real close of the market. moving the price from 36.20 to 37.35. I figured that the stock should not get much lower and, up to this point, lucked out and got a low price. I'm trying to expand my abilities technically evaluating charts. I don't use puts, call i understand them by definition but not well enough to bet on them. I make about 7-10 / trade but must learn more to earn more....no i cant afford a class. So teach me how to read this chart.
AT&T @ SupportLike the Hammer/pinbar here. Long with a fairly tight stop, so position size can be fairly large if so desired. Also clipping a 5% dividend in the meantime. NYSE:T
$37.411 magic price.ATT is below deal threshold. Time Warner shareholders will receive $107.50 per share under the terms of the merger, comprised of $53.75 per share in cash and $53.75 per share in AT&T stock. The stock portion will be subject to a collar such that Time Warner shareholders will receive 1.437 AT&T shares if AT&T’s average stock price is below $37.411 at closing and 1.3 AT&T shares if AT&T’s average stock price is above $41.349 at closing.
