AT&T Inc. (NYSE:T) shares are trading higher Thursday. But they are still in a downtrend. If they reach the $20 level, there is a chance they find a bottom. As you can see on the chart, this level has been important for AT&T. It is the Stock of the Day.
Charts are illustrations of market psychology and supply and demand.
Many new traders believe that stocks move because of fundamentals. They think that financial metrics such as price-to-earnings ratios or revenue are important in trading.
But most of the time, stocks move because of the emotions and psychology of the people who are doing the trading.
For example, the $20 level has been important for AT&T. There is no way fundamentals or news can explain the importance of round levels.
It is easy to explain when psychology is considered. People like to place orders at round levels.
$20 was the first resistance in September 2024. When this resistance was broken, many of the people who sold at it decided that doing so was a mistake. Some of them also decided to buy their shares back if they could ever do so at their selling price.
When the shares fell back to this level in January 2025, they placed buy orders. The large quantity of these orders created support.
After the shares rallied, many of the people who sold around $20 regretted it. A number decided that if they could eventually do so, they would buy their shares back at the selling price.
When AT&T dropped back to $20 in June, they placed buy orders. These orders created support at the level again.
If the stock reaches $20 once more, remorseful sellers will place buy orders. If there is a large quantity of these orders, it could create support at the level once again.
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