Verizon got slammed today on 4th quarter EPS reports and was down 4% in one day. My question is how does a stock that has under-performed its sector for an entire year still get sold down on a quarter miss when the stock has been telling investors its a dog for all of 2016? Citigroup, Wells Fargo, FBR, HSBC all had buy/outperforms on the stock going into the Q call. LOL
Usually this becomes the final push to flush out the remaining bag holders. Watch for analysts to downgrade Verizon tomorrow and this can create opportunities. Notice the ratio of VZ and the Telecom ETF IYZ chart below and the level trading beneath the "rejection" line.
The summer of last year we saw 100% of the companies within the telecom sector bullish and therefore there was no one left to buy. Last June I suggested telecom would be the Big Short opportunity. This sector went from 100% to only 38% after my call. Today I am now predicting that along with Gold, Telecom will be where the best long opportunities will come from.
The above telecom companies have been screened for positive Institutional Money Flow. This is a good place to start looking for names to buy.