Editor’s Note: Due to technical issues, Sam was unable to provide today’s Trade of the Day. James Brumley is filling in for today. You can read Sam’s market outlook here.
American Tower Corp (AMT) — American Tower is the owner and operator of more than 87,000 towers all over the world that facilitate cell phone communications, television signals, mobile broadband, radio and more. Organized as a REIT, it collects payments from telco customers and then passes along — after deducting expenses — a significant portion of those payments to shareholders.
The current dividend yield of 1.9% for AMT is modest, and broadly speaking, rising interest rates are generally expected to work against communication tower stocks. American Tower, however, may prove to be resistant to that threat this time around as its mix of overseas and domestic sites along with a looming end to a currency headwind should mean the worst is over.
That’s what the chart says traders are thinking about AMT now, anyway.
After a multimonth, well-organized lull between December and June, American Tower shares bullishly broke out of a narrow converging wedge shape to finally hurdle the 200-day moving average line this week. It’s not been a smooth breakout, but it’s crossed several key clues off its checklist including a MACD cross that materialized above the zero level.
While the rally is technically solid and well-founded, it’s likely AMT will remain as choppy in the near future as it has been in the recent past. In other words, don’t be surprised to see it take two steps forward and then one step back again for a while all the way en route to a target of just above $101.
It’s not going to be the biggest or the fastest trade in the world, but the offset is higher odds of bullishness and some predictability. The biggest risk may be an itch to take profits before it’s hit its maximum value.
The best stop point is likely to be the 20-day moving average line, currently at $95.31.
