Chart Wars: Nokia, AT&T Look Set To Head Higher But One Stock Could Explode

Nokia Corporation NOK and AT&T, Inc T have seen some volatility recently as telecom earnings have come underway.

Nokia has fluctuated 21.57% since Dec. 28 when the stock hit a high of $6.40. AT&T has see-sawed 16.64% between $23.66 and $27.48 since Dec. 20, with a big 9.1% drop on Jan. 26 after printing its fourth-quarter earnings results.

On Thursday, both stocks opened lower but began to recover intraday in unison with the SPDR S&P 500 SPY, which gapped down 1.35% but quickly filled that gap. Despite the volatility, Nokia and AT&T have settled into bullish patterns on their daily charts, with AT&T confirming an uptrend and Nokia forming into a possible bull flag pattern. If the stocks can continue to trade within their patterns, both could see higher prices over the coming days and weeks, although the bull flag on Nokia could become an explosive move if it's confirmed.

It should be noted, however, that events affecting the general markets, negative or positive reactions to earnings prints and news headlines about a stock can quickly invalidate patterns and breakouts. As the saying goes, "the trend is your friend until it isn't" and any trader in a position should have a clear stop set in place and manage their risk versus reward.

See Also: How to Buy Nokia Stock Right Now

In The News: Nokia printed its fourth-quarter earnings on Thursday morning, reporting earnings per share of 15 cents, which beat the estimate by two cents. The stock reacted bearishly to the beat just as it did when Nokia printed a third-quarter beat on Oct. 28. The company also announced it would restart its quarterly dividend and share buyback program.

AT&T printed a fourth-quarter earnings beat on Jan. 26, reporting earnings per share of 78 cents versus an estimate of 76 cents, but the stock sold off heavily due to the company issuing fiscal-year 2022 guidance below analyst estimates.

The Nokia Chart: Nokia gapped down over 2% lower on Thursday but bulls came in and immediately bought the dip, which caused the stock to regain support at the eight-day exponential moving average (EMA).

• The move lower may serve as the first candle in a possible bull flag pattern although more daily candles will need to print for confirmation. The bull flag will be negated if Nokia closes a trading day below the eight-day EMA.
• If the bull flag is confirmed and Nokia breaks up bullishly from the pattern on above-average volume, the measured move is almost 14%, which indicates Nokia could trade up toward the $6.60 level. 
• Nokia has two nearby gaps on its chart which the stock is likely to fill in the future. The first gap is between $5.72 and $5.77 and the second gap falls between the $6.04 and $6.07 range. Bulls may feel more comfortable going forward if Nokia was to drop down and fill the lower gap over the coming days.
• There is resistance above at $5.95 and $6.10 and support below at $5.80 and $5.69.

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The AT&T Chart: AT&T is trading in a confirmed uptrend after having printed a higher low on Wednesday at the $24.07 level, which is above the most recent low of $23.56 created on Jan. 27.

• To continue in the pattern AT&T will need to print a higher high above $25.54 over the coming days, otherwise the stock may form into a triangle pattern, with lower highs and higher lows.
• On Thursday morning, AT&T was regaining the 50-day simple moving average as support, which is bullish. If the stock can close the day near its high-of-day price it will print a bullish Marubozu candlestick, which could indicate higher prices will come again on Friday.
• AT&T has resistance above at $25.28 and $26.03 and support below at $24.66 and $23.85.