Another day, and a new sentiment on the street in terms of buyers versus sellers. It's not always easy to find a bearish chart. I know I've said that 10 times already, but it is true. I can usually turn up five to 10 times the number of bullish charts on a day-to-day basis than bearish ones. That's just the current market environment. When that changes and bears outnumber bulls by that margin, we're likely to have finally seen a big enough pullback to scare people and offer fantastic risk-reward opportunities.
The ursine champion of the day is Ventas (VTR). With long-term Treasuries moving lower in terms of price, it isn't a huge surprise to see a real estate investment trust make the list. I was a little surprised to see a health care REIT make the list, but price action is what it is -- ugly.
Ventas has lost some major support on the daily chart just below $66. We still have more than half a day's trading left, so the stock could very well bounce, but without a bounce, Ventas is in trouble. The chart will create resistance just below $66 as well as just below $68. There's a shot for a dead-cat bounce soon, but I suspect at least one of those two resistance levels will hold, if not both. The last few dead cat bounces came when the relative strength indicator (top of the chart) was significantly oversold. It isn't there yet, but I would begin to watch for one when the 13-period RSI begins to base below 30. I believe we'll also need to see a bigger push lower in the Force Index to get a dead-cat bounce in play. Overall, though, I expect to see $61 before getting to $68 or higher again.
The weekly chart may be more interesting. Support actually comes in around $64, which is contrary to the daily chart and there are two support lines to suggest that. So, on one hand, maybe the daily view isn't quite so bearish. If $64 fails, though, the $61 downside target on the daily chart may be far too conservative. Ventas looks more like a $58 stock if it closes the week below $64. We are entering oversold territory on the weekly chart, which has been a decent a bounce point for the stock, but the extension of the vortex indicator is telling us the downward trend is very strong. Add in the TRIX (triple smoothed exponential moving average) which, while bearish, is still above zero, and that lessens the chance of any bounce going above $68. I would prefer to see the TRIX somewhere between 0.25 and 0.50 lower to exaggerate the oversold nature of the weekly chart.
This is one where we just need a day or two more of information, but is certainly near the top of the short watch list.