Telecom Stocks Ringing Off the Hook – CHL, VOD, T, S

As the market struggles to make it back into positive territory on the year, one sector has managed to catch fire this summer. The S&P 500 has risen only 3.9% over the past three months, while the telecommunications sector has charged ahead to the tune of 11.8% over the same time period. Not only are dividends rich in the sector, but technicals have also been growing increasingly appealing. Here are four telecom stocks that have been breaking out.

Dialing Long Distance

In early June, the 50-day moving average for China Mobile (NYSE: CHL) pushed above its 200-day moving average and has since produced a widening gap. In the first-half of 2010, the company was able to grow its operating revenue 7.9% over its results from the first six months of 2009. The company has been facing intensifying competition in China, but is increasing its focus on 3G services in an effort to strengthen its customer base.

Shares of China Mobile pulled back to the tune of 2.3% on Tuesday after Vodafone (NYSE: VOD) announced its plans to sell its 3.2% stake in China Mobile for $6.6 billion. Vodafone had originally invested in China Mobile in 2000, but more recently has been looking to slim down its operations.

Vodafone itself is presently trading near its 52-week high and has seen a rapid recovery in its stock price which was trading at a 52-week low as recently as May. The 50-day moving average for VOD sliced above its 200-day moving average in mid-August and has been hanging strong ever since. This stock also sports a healthy dividend yield of 6.8%.

Registered members can instantly access our China Mobile and Vodafone trading reports for assistance in implementing adequate risk controls when trading either of these stocks.

Local Calling Guide

The domestic telecom stocks in the U.S. have also been having a prosperous summer. In the wake of the recent rally by AT&T (NYSE: T), the 50-day moving average of its stock price has pulled even with its 200-day moving average.

The company is coming off of a Q2 in which adjusted EPS increased 13.0% on a year-over-year basis. AT&T experienced slight upticks in both consolidated revenue and operating margin during the quarter. Overall, shares of AT&T are down 2.4% since the beginning of the year.

Another domestic carrier on the move that traders may want to keep an eye on is Sprint Nextel (NYSE: S). Year-to-date, shares of this company are up 20.8%. The 50-day moving average is still slightly below the 200-day moving average for this stock, but the gap is closing fast.

Paid members can check out our Sprint and AT&T trading reports for an in-depth technical analysis of each stock.

Support and Resistance Plot Chart for

Real Time Updates for Repeat Institutional Readers:

Factset: Request User/Pass

Bloomberg, Reuters, Refinitiv, Zacks, or IB users: Access Here.