T-Mobile US, Inc. (TMUS) Price Forecast: Monthly Breakout Signals Reversal

200-Week Support Triggers Monthly Breakout

The stock of T-Mobile US (TMUS) recently tested long-term support near the 200-week average with a low of $181.36. It is on the radar after a one-month bullish reversal triggered last week as buyers took back control following that low. That led to a monthly breakout above January’s high of $202.69. Additional validation of support near the low, comes from the 61.8% Fibonacci retracement at $182.82. The 200-week average is currently at $179.78.

February Strength Builds Monthly Structure

It looks likely that February will end with a higher monthly high and higher low. A monthly close above January’s high will confirm the bullish reversal on the dominant monthly timeframe. The weekly timeframe may confirm this week with a close above last week’s high of $202.69.

Earnings Fuel Bullish Outside Day

T-Mobile US reported earnings premarket on Thursday resulting in a wide-range bullish outside day on strong volume and a successful test of support near the 20-day average at $192.66. The pattern has extra significance as its range exceeded the prior eight sessions. When combined with the monthly signal and a test of long-term trend support, it looks like buyers may remain in control as a bullish trend reversal progresses.

Long-Term Trend Support Remains Intact

For TMUS, the 200-week average has significance. It has been validated as dynamic support for the long-term bull trend since May 2013. That’s over 12 years. Since the trend is assumed to continue until there is convincing evidence to the contrary, the recent low in TMUS may mark a long-term low for the stock. It established a higher swing low within the long-term bull trend.

RSI and Structure Confirm Improving Momentum

Note that the January low completed a 34.4% decline in TMUS, while February’s advance ends a five-month series of lower monthly highs and lower lows. Other bullish signs include a relatively extreme weekly Relative Strength Index (RSI) reading, as the recent oversold reading reached 29.8, a level not seen since January 2022.

Pullbacks May Offer Accumulation Opportunities

Above bullish evidence for TMUS shows improving demand that is likely in its early stages. Therefore, weakness will likely be used by investors to accumulate the stock. Key potential support levels during a pullback include the 50-day average at $197.27 and the 20-day average at $192.66. Adding to the bullish evidence for TMUS is the initial decline seen early in Wednesday’s session. Support was seen near the 20-day average, which provided a springboard for the subsequent sharp intraday advance.