It’s been an odd day for the market.
President Trump recently announced that the ceasefire in Syria is “permanent,” and sanctions on the country will soon be lifted. Before that, Mark Zuckerberg fielded questions from the House Financial Services Committee in a hearing that turned out to be a total farce. They wanted to find out more about Facebook’s new Libra cryptocurrency project.
The highlight of the session was when Rep. Al Green (D-TX) asked Zuckerberg if he was aware that any of the Libra staffers were LGBTQ. The Facebook CEO replied that, no, he wasn’t sure.
Green seemed disappointed by the response.
The inquiry capped off a congressional hearing that featured other tone-deaf gems, like Rep. Ann Wagner’s (R-MO) remarks about sex trafficking. She asked Zuckerberg what Facebook was doing to reduce sex trafficker activity online, in a hearing that was called to discuss a new, potentially game-changing cryptocurrency.
Are you kidding me?
It’s no surprise that the market traded flat today as a result, even though earnings have continued to relatively sharp.
But like I said before, if companies keep posting impressive financials, bulls will eventually bring the major indexes to new all-time highs. No amount of public Zuckerberg skewering will stop Facebook shares from rising if earnings look good.
However, for today’s feature, I don’t want to focus on Facebook’s stock. Instead, we need to look at another company, one whose stock could enjoy a massive breakout if the market ends up going higher over the next few weeks.
In the weekly candlestick chart above, you can see that CenturyLink Inc. (NYSE: CTL), a telecom company, had a rough start to the year. It wasn’t until April that things started to turn around.
And now, after setting two higher lows, CTL may be ready for an upside breakout. Support, set back in December 2018, became resistance a few months later after a downside breakout occurred. Then, a little over a month ago, CTL almost breached that level of resistance.
The rally stalled, however, as CTL was trading well outside of its normal range and above the upper Bollinger Band (BB). And right now, it’s almost touching the upper BB once again.
Normally, I’d avoid chasing a stock in the direction of the closest BB. That’s usually a bad idea.
But in this case, because we have two higher lows and key resistance nearby, CTL might be worth making an exception for. The current weekly candlestick is trading above the last five candle bodies to boot.
If CTL keeps rising, eventually past key resistance, it might make sense to go long at $14.00. From there, $16.75 is the next resistance level, which is 21% away from $14.00. That’s plenty of room to run for a stock that’s trending upwards after recently hitting a 25-year low…
…and plenty of opportunity for short-term traders to pocket a little extra cash.
