Telefonica (TEF) Loses 15% in 4 Weeks, Here's Why a Trend Reversal May be Around the Corner

Core Viewpoint - Telefonica (TEF) has experienced a significant downtrend, with a 15.1% decline in stock price over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to improved earnings expectations from analysts [1]. Group 1: Technical Analysis - The Relative Strength Index (RSI) is a key technical indicator used to determine if a stock is oversold, with a reading below 30 typically indicating this condition [2]. - TEF's current RSI reading is 18.72, indicating that the heavy selling pressure may be exhausting itself, which could lead to a reversal in the stock's trend [5]. Group 2: Fundamental Analysis - There is strong consensus among sell-side analysts regarding an increase in earnings estimates for TEF, with a 7.6% rise in the consensus EPS estimate over the last 30 days, which often correlates with price appreciation [7]. - TEF holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a near-term turnaround [8].