Conclusion, Investment Implications, Strategy

T-Mobile US, Inc. (TMUS) is amid favorable conditions to resume its April 2020 major uptrend from minor Tactical support near $142.78, which is currently being tested.  A sustained rise above this area would target an additional 10% rise to $163.50 per share.  This is an Asbury Momentum trade idea.

Analysis and Rationale

T-Mobile US, Inc.(TMUS), together with its subsidiaries, provides mobile communications services in the United States, Puerto Rico, and the United States Virgin Islands. The company offers voice, messaging, and data services to 102.1 million customers in the postpaid, prepaid, and wholesale markets. It also provides wireless devices, including smartphones, wearables, and tablets and other mobile communication devices, as well as wireless devices and accessories. In addition, the company offers services, devices, and accessories under the T-Mobile and Metro by T-Mobile brands through its owned and operated retail stores, app and customer care channels, and its websites. It also sells its devices to dealers and other third party distributors for resale through independent third-party retail outlets and various third-party websites. As of December 31, 2020, it operated approximately 108,000 macro towers and 69,000 small cell/distributed antenna system sites; and approximately 3,400 T-Mobile and Metro by T-Mobile retail locations, including stores and kiosks. The company was founded in 1994 and is headquartered in Bellevue, Washington.

The rightmost green highlights in the upper panel of Chart 1 below show that TMUS is currently rebounding from a Jly 9th test of its 50-day moving average, a widely-watched minor trend proxy current situated at $161.88.  Meanwhile, the blue daily relative performance line between TMUS and the SPDR S&P 500 ETF (SPY) in the lower panel is rebounding from a coincident test of its 63-day moving average, which is our Strategic time period. 

Together they suggest a new Tactical buying opportunity within TMUS’ April 2020 major uptrend as defined by its 200-day MA.  Note that similar tests of outright and relative support on May 4th and Feb 22nd coincided with new Tactical periods of outright and relative strength.

Chart 1

A sustained rise above the $142.78 area would target an additional 10% rise to $163.50 per share. 

Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $144.51 area, a long entry price of $149.14 would provide a 1:3.1 risk/reward ratio (risking $1.00 to make $3.10) with an initial risk of 3.1%.

Table 1

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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.