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AT&T gives entry signal to buy against its sector

March 17, 2014

At the start of March, I gave the entry conditions for buying the pair AT&T (T) v iShares U.S. Telecommunications (IYZ). These conditions have now been met.

T v IYZ

TIYZWEEKLY

On Friday, the 14 week RSI closed above 30. Also, the Performance Ranking (PR) of AT&T against the components of IYZ has improved, forming a bullish divergence. This method was outlined with the example using the energy sector.

Daily chart

TIYZDAILY

There is a bullish divergence, initially with RSI below 30 on 25 February but at the final low on 04 March, with RSI above 30. This fits my RSI divergence criteria.

The pair is opened at Friday’s close of 1.12306. The stop loss is a new low, below the 04 March low of 1.09428, so quite a near stop loss, only 2.6% lower.

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