Always interesting to analyse stocks in a longer term downtrend and CenturyLink is certainly one such stock, which has seen its share price slump from a high of over $24 per share towards the end of last year, to the current level of $10.23 at the time of writing, as we prepare to see a move into single figures. This stock has many of the characteristics of Ford (F) which I have highlighted in other analysis, and which has since managed to recover back into double figures. So the question now pressing CTL watchers is simple – is it time to buy? And for an answer let’s start with volume.
Here we certainly see initial stopping volume during February and also March with two stand out high volume weeks, both characterised with deep wicks to the lower body as the market makers move in to absorb some of the heavy selling. This has also been repeated once more in early May with further buying on a similar candle. Last week’s limp effort to rally was a sign the stock is not yet ready to reverse and therefore further ‘mopping up’ is likely with a congestion phase to follow. Patience is therefore required before any reversal can take hold.
So one for a speculative buy once we have moved deeper into single figures, and if you want to see how this chart is likely to develop in the weeks and months ahead, check out Ford. Then it’s a question of selecting the entry level once a platform of support has been built, and any resistance breached.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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