AT&T Shares to Tumble on FCC Fines?

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AT&T Shares to Tumble on FCC Fines?

AT&T Shares to Tumble on FCC Fines?

News that telecom giant AT&T will have to pay $1 million in fines to the Federal Communications Commission (FCC) could weigh on the company’s share price moving forward. This complaint was filed last year, as the company was sued for misleading its consumers.

According to the agency, AT&T implemented a speed cap on users’ data, which, the FCC says, slowed it for as many as 12 days each month. The company denies these allegations but the FCC says AT&T sold consumers data plans advertised as unlimited, then capped data speeds for those subscribers after they used five gigabytes of data within a billing cycle.

AT&T Shares Forecast

At the moment, AT&T shares are consolidating inside a triangle chart pattern, suggesting the possibility of a breakout. The recent fine imposed by the FCC could put the path of least resistance to the downside, as investors doubt that the company could be able to revise its strategy while staying profitable.

“Consumers deserve to get what they pay for,” FCC Chairman Tom Wheeler said in a statement. “Broadband providers must be up front and transparent about the services they provide. The FCC will not stand idly by while consumers are deceived by misleading marketing materials and insufficient disclosure.”

Stochastic is pointing down from the overbought zone, confirming that a potential downside break might be seen. However, RSI is still on the move up, which also suggests further gains or potential consolidation.

The short-term 100 SMA is still above the long-term 200 SMA, indicating that the uptrend might carry on. However, the moving averages are inching closer together with a potential downside crossover looming.

A break below $34.50/share could lead to a sharp selloff in AT&T shares, which might lead to a drop until the next area of interest around $30/share. On the other hand, an upside break could spark a move up to $40/share.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.