You know how it is when you try to breakthrough some roadblock that just won't give. That happens with stocks too. Telephone & Data Systems (NYSE:TDS) comes to mind.
This stock was on my radar recently as it started back higher from a mild pullback. For my style, though, it was hard to buy this action. The chart below explains why. Buying a stock that is reversing higher off of a higher low is a great recipe for a profitable trade. But for TDS, there's resistance just above at $30.60.
And that $30.60 has acted as resistance the last 4 times the stock got there. This is the alternate version of the old trader’s saying, “there's no such thing as a triple top.” Four touches is not a triple top. But will the 5th time be the charm for Telephone & Data Systems? There are some positives in the chart that suggest it might be.
First, the momentum is bullish and building. The RSI is in the bullish zone and rising. The MACD is about to cross up. And it recently printed a bullish Golden Cross, with the 50-day SMA crossing up through the 200-day SMA. But confirmation is essential to trading. Until the price crosses $30.60 and stays there, just stay away. It may end up striking its head against the wall yet again.