Long T in the long-term, but looks overbought at present

AT&T stock has been rising rapidly after activist investor Elliot Management announced a $3.2 billion stake in the company on September 9th.

The RSI has crossed into very oversold territory while the ADI is signaling only a moderately strong trend. At the same time, the stock has moved above its 9-day moving average, which often signals a short-term correction. The chart is going parabolic with today's trading having gone almost vertical.

But there remains many reasons to be bullish in the long-term. Long-term resistance at 37.71 has been broken through. The company announced its 5G strategy today and urged competitors to do the same. T is ahead of the competition. Earnings have met or exceeded expectations for the last three quarters and are forecasted to do well in October. The stock has an attractive dividend of 6% and has a track record of increasing that dividend.

Put options could be profitable in the near-term. Buying dips could also be a good strategy. Looking to acquire a large stake in T? Use dollar-cost averaging over time. Avoid FOMO buying during mania like this. Long-term, T is an excellent choice, but a parabolic or vertical trend accompanied by universal optimism is always cause for caution.