Earlier today, the major indexes hit new all-time highs. The market surged in response to cooled tensions between the U.S. and Iran, along with a drop in jobless claims. As it stands, analysts are predicting another rollicking jobs report. Corporate earnings are expected to impress, too, in the coming weeks.
All in all, bulls have plenty of reasons to stay optimistic in an “overcooked” market. With key resistance breached in the S&P, Dow, and Nasdaq Composite, another protracted rally could be in our future.
And while plenty of stocks already enjoyed a lift over the last few weeks, others didn’t participate in the buying-frenzy. Some companies – particularly those not correlated with the market – actually saw their shares fall since late October/early November, when the market’s winning-streak started.
CenturyLink Inc. (NYSE: CTL) was one of those companies. Over the next few weeks, though, CTL’s luck could quickly change.
In the daily candlestick chart above, you can see that CTL has been locked firmly into a longer-term uptrend. The stock has traded deliberately – both up and down – for months, now. After dropping in November and December, it’s starting to reverse its short-term trend yet again.
Today, CTL broke out of its minor bearish trend (as represented by the yellow trendline) when it closed above that trendline. The stock even set another higher low, suggesting that an uptrend continuation is right around the corner. Contact with the lower Bollinger Band (BB) was made, too. The last time that happened (back in October), CTL went on a 30-session run that resulted in a 34% gain.
Will lightning strike twice? We might not see such a huge gain again, but odds are that CTL will rise enough to generate a profitable trade. If the stock trades above the current day’s high, it might make sense to go long with a trade trigger of $13.36. From there, CTL’s got plenty of room to run until hitting key resistance at a little north of $15.00. Even if the stock doesn’t set a higher high, this trade could generate a nice gain.
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So, over the next week, even if the market drops (or rises, for that matter), CTL could still be a winner. Because it’s so disconnected with the indexes, it’s a great stock to look at.
Especially with equities looking overbought.
That’s not to say that stocks will drop as a whole, but with CTL, you’ve at least got a trade that’s “insulated” from a somewhat volatile market.