Telus moving lower - Stocktrades Canada

Telus has taken a bit of a tumble of late. Do you think it is because investors are unhappy that Telus is going to raise money? Should we consider this dip to be a potential buying opportunity?

Also, I stumbled across the following Daily Ticker Alert (which I used to track on paper and for the most part they never really panned out so I would not take any action based on it). That said was wondering what you think of these alerts (especially given the present sentiment):
TELUS Corp forms bearish “Diamond Top” chart pattern
Mar 26, 2021

Trading Central has detected a “Diamond Top” chart pattern formed on TELUS Corp (T:TSX). This bearish signal indicates that the stock price may fall from the close of $25.33 to the range of $23.50 – $23.90. The pattern formed over 54 days which is roughly the period of time in which the target price range may be achieved, according to standard principles of technical analysis.

Tells Me: The price seems to have reached a top, showing signs of reversal as it has broken downward after a period of uncertainty or consolidation. The Diamond Top pattern begins during an uptrend as prices create higher highs and lower lows in a broadening pattern. Then the trading range gradually narrows after the highs peak and the lows start trending upward. When the price breaks downward out of the diamonds boundary lines, it marks a significant reversal to a new downtrend.

This bearish pattern can be seen on the following chart and was detected by Trading Central proprietary pattern recognition technology.

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Asked on March 27, 2021 6:24 am

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Private answer

Hi there,

Yes - it is likely the stock dipped in response to the new share offering. In our opinion, it really is non-event over the long term. The offering is expected to accelerate growth and be accretive to revenue and earnings. It may take some time for the markets to digest these shares, but long-term we believe this will be but a blip on the radar.

Since we are not traders, short-term trading pattern don't really matter to us. This is especially true of foundational holdings such as Telus. Any dips for blue chip companies like Telus - we consider to be buying opportunities. What you describe above may happen given the number of new shares that will come on the market, but as mentioned - since we ae not traders, we would not be selling Telus - just holding and potentially using the opportunity (if it comes) to average in.

Mat
(Of note, I am long Telus- have been for over a decade).

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Posted by Mathieu Litalien

Answered on March 27, 2021 8:50 am

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