5th Time a Charm for Telephone Data Systems?

• Posted by Greg Harmon
• on April 20th, 2016

You know how it is. When you keep trying and trying to breakthrough some roadblock that is stalling you. It seems like there is a wall in front of you and no matter how many times you try you cannot break through. That happens in some stocks too. Telephone Data & Systems ($TDS) comes to mind.

This stock was on my radar this past weekend as it had started back higher from a mild pullback. For my style it was hard to buy this action this time though. The chart below explains why. Buying a stock that is reversing higher off of a higher low is a great recipe for a profitable trade. But for Telephone Data & Systems there is resistance just above at $30.60.

And that $30.60 has acted as resistance the last 4 times the stock got there. This is the alternate version of the old trader’s saying, “there is no such thing as a triple top.” Four touches is not a triple top. But will the 5th time be the charm for Telephone Data & Systems? There are some positives in the chart that suggest it might be.

First the momentum is bullish and building. The RSI is in the bullish zone and rising. The MACD is about to cross up. And it recently printed a bullish Golden Cross, with the 50 day SMA crossing up through the 200 day SMA. But confirmation is essential to trading. Until the price crosses $30.60 and stays there, just stay away. It may end up just a 5th time striking its head against the wall.

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