In his first "Executive Decision" segment of Mad Money Thursday night, Jim Cramer welcomed back Hamid Moghadam, chairman and CEO of Prologis (PLD) , the warehouse REIT.
Moghadam said market dynamics continue to be highly favorable for Prologis and demand has never been stronger. Not only is e-commerce continuing to accelerate, but companies are building up their inventories for resilience and disaster recovery. And consumption is also growing, making for near-perfect conditions for Prologis.
When asked about competition, Moghadam noted that the supply of suitable real estate remains tight in many markets. Prologis has been diligent in its land efforts, however, and has the land to add another 200 million square feet of capacity.
Finally, Moghadam commented on the labor market, saying that not only is the cost of labor increasing, but the availability of labor continues to shrink, forcing more and more customers to turn to technology and automation to get the job done.
Let's check out the PLD charts again. In our last review back on Oct. 28 we wrote that, "Traders could go long PLD on a correction to the $140 area risking to $130. The $190 area is our upside price target after this anticipated pullback."
In the updated daily bar chart of PLD, below, we can see that traders got one very brief dip towards $140 at the beginning of November. You can see that the rally stopped just short of $170 and $20 below our $190 target. PLD is trading below the cresting 50-day moving average line. The slope of the 200-day line is still positive.
The On-Balance-Volume (OBV) line stalled out in December and the Moving Average Convergence Divergence (MACD) oscillator has quickly dropped below the zero line for a sell signal.
In the weekly Japanese candlestick chart of PLD, below, we can see a bearish picture. We can see a large bearish engulfing pattern at the end of December and the beginning of January to mark a top reversal. The latest candle shows us an upper shadow telling us that the highs are being rejected.
The OBV line shows a peak and the MACD oscillator has crossed to the downside for a take profit sell signal.
In this daily Point and Figure chart of PLD, below, we can see a potential downside price target in the $132 area.
In this long-term weekly close only Point and Figure chart of PLD, below, we can see that prices reached and exceeded a price of $122.
Bottom-line strategy: The broader market is under pressure and PLD is not likely to be left unscathed with a bearish target on the Point and Figure chart. Sell any remaining longs and then avoid the long side.
