Tomahawk, WI 8/30/2013 (BasicsMedia) – The market has now been abuzz with the news of Vodafone Group Plc (ADR) (NASDAQ:VOD) (Closed: $31.80, Up: 8.13%) selling its 45% stake in Verizon Communications Inc. (NYSE:VZ) (Closed: $47.82, Up: 2.71%) and that made the both the stocks jump on Thursday. The volume of VOD at 66 million was way higher than the average volume of 8 million and the same happened to VZ too, where at 36 million the volume was more than 3 times the average volume of 11 million. Let’s check their technical status, according to the price action in the long term charts to check where they might go from here.

Verizon Communications Inc. (NYSE:VZ) had its golden time in the period of 1988 – 1999, when the IT bubble pushed every stock even remotely related to astronomical highs. It went to make a top at $69.50 in 1999 from its 1988 low of $15.50. When the bubble crashed, it dropped like a stone to make a bottom at $26 in 2002. The next rally, even in the bull market of 2005 – 2007, was corrective only in nature and topped out at $46.24 in 2007. The bear market of 2008 took it to $23 levels from where the latest rally towards the 2013 high of $54.31 unfolded.

This high of $54.31 is exactly at the 2/3rd level or 66.6% retracement level of the entire fall from the 1999 high of $69.50 to the 2008 bottom of $23.07 and hence immensely important. The price formed a Shooting Star candle in July in the quarterly charts.

 A break of $46 would break the rising channel containing the entire rise from the 2010 bottom of $26 confirming the reversal and could take the price to $37 – $40 levels or even lower. Investors could exit the stock on a break of the $46 levels.

Similar to the company discussed above, Vodafone Group Plc (ADR) (NASDAQ:VOD) too made its life time high in the IT bubble of 1999 – 2000. It reached an amazing level of $64 from the Triple Bottom made at $3.60 levels in the period of 1992 – 1993. When the bubble had burst and the bear market of 2000 – 2002 ended, the stock had lost almost 85% of its entire gain to make a bottom at $12 in 2002. Just like VZ, it made a corrective rally in the next bull market to reach $40.87 in 2007. The next bear market clobbered it and took it to $15.30 in 2008, where it made a Double bottom by early 2009.

The current rally from the 2009 bottom has been moving in 3 legs and the C wave is unfolding now. It has faced resistance repeatedly at the 61.8% retracement level, the Golden Ratio, of the entire fall of 2007 – 2008. But yesterday, it cleared the supply zone with astounding volume. The equality of the waves gives us a target of $38.71 in the coming months. Resistance could come from the zone of $32.30 – $32.90.

Investors could buy this stock on any correction near $30.80 – $31 levels.

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