A number of Real Money subscribers have emailed me about plays to invest in light of my bearish views for 2022. Readers have asked about the energy sector, healthcare and also real estate. Makes a lot of sense.
Simon Property Group ( SPG) is a real estate investment trust that invests in shopping malls and outlets. They're slated to report their latest quarterly numbers after the close of trading Monday.
Let's check on the charts.
In this daily bar chart of SPG, below, we can see that prices have worked higher the past 12 months. SPG is trading below the declining 50-day moving average line but above the more important and rising 200-day line. In January the rising 200-day line was successfully tested. Trading volume is lower in January than December. Often the level of trading volume increases when prices test the 200-day line as many traders view it as a buying opportunity. With an increase in volume it becomes questionable that traders stepped up to the plate to buy.
The On-Balance-Volume (OBV) line has drifted lower since late November but it may be making a turn around now to the upside. An earnings beat could be the catalyst. The Moving Average Convergence Divergence (MACD) oscillator is close to a cover shorts buy signal.
In this weekly Japanese candlestick chart of SPG, below, we can see that prices are in an uptrend and recently tested the rising 40-week moving average line. The weekly OBV line has been stalled or even a little soft in the past three months or so. The MACD oscillator is pointed lower in a take profit sell signal.
In this daily Point and Figure chart of SPG, below, we can see a potential downside price target in the $111 area.
Bottom line strategy: I have no special knowledge of what SPG is going to report to shareholders this evening. A quick look at the ( XLRE) , the S&P Real Estate sector ETF, gives me the same feeling - the charts are okay but not not strong enough to recommend the long side ahead of an earnings report.
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Performance is excellent, free cash flow is robust, guidance is solid and sales are growing. Here's my one nitpick and how to play the stock.
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