Shares of AT&T Inc. (NYSE:T) have run into a wall of resistance. This means they may be about to stage a breakout, which would be bullish for the stock.
Resistance is a large group of investors who are trying to sell their shares at, or close to, the same price. In this case, it’s $20.75. At this level there is more than enough supply to fill all of the demand. This is why rallies end when they reach resistance levels.
But if a stock trades above the resistance level, traders say that it has "broken out." This is bullish because it shows that the sellers who created the resistance have left the market. They have either finished or canceled their orders.
With this large amount of supply out of the way, buyers will be forced to pay higher prices. This could force the shares into rally mode.
To learn more about trading, check out the new Benzinga Trading School.
Photo: Tdorante10/Wikimedia
