Since its October low, AT&T has easily beaten the broad market. In fact, the stock remains above its cycle low, while the broad market has declined to levels last seen in the late 1990s.

If history is a guide, this resilience is likely to stick. Between March 31st and September 30th, AT&T’s stock price has climbed in 20 out of the last 24 years or 83% of the time on a total return basis. Notably, each time this seasonal tendency did not repeat (i.e. 1990, 1996, 2002, 2008), it was followed by five years when it did. Including the down years, on average AT&T’s stock climbed 8% during this period.

True, seasonal patterns can break down, yet coupled with the “Strong Buy” recommendation from our Rankings System, a lengthy outperformance phase is likely relative to the overall market.

The $20 price range represents a key support level. A breach of this level would force us to reevaluate our buy recommendation.

Happy trading.

Disclosure: No positions at the time of writing.

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