Simon Property Group (SPG) is selling $500 million of 3.500% senior notes due September 2025, $750 million of 2.650% senior notes due June 2030, and $750 million of 3.800% senior notes due June 2050. Closing date is July 9. Net proceeds will reportedly be used to fund the planned optional redemption at par and for general corporate purposes.
Let's check out the charts and indicators of SPG.
In this daily bar chart of SPG, below, we can see that prices were in a downtrend long before the pandemic weakness in February and March. Prices did make a low in March but also a number of retests of the March low can be seen. SPG did not show much on the upside until late May and early June when prices tried a rally towards the round number of $100 - a double from the extreme lows of March and April.
Trading volume has been heavy since March but the movement of the On-Balance-Volume (OBV) line has been very uneven and tells me that there is both aggressive buyer and aggressive selling. Has SPG become a trading vehicle for short-term traders?
The Moving Average Convergence Divergence (MACD) oscillator is close to the zero line telling me that there is little trend strength being shown.
In this weekly bar chart of SPG, below, we can see that prices "topped out" in 2018 and early 2019 in the $180-$190 area before its lengthy decline. Prices are well below the declining 40-week moving average line.
The weekly OBV line has been weak since October and while it might be bottoming we cannot say it is strengthening.
The MACD oscillator finally shows a cover shorts buy signal in late May. A buy signal may not come for a while.
In this daily Point and Figure chart of SPG, below, we can see that the software is projecting a potential upside price target in the $93 area. Not too impressive, in my opinion.
Bottom line strategy: SPG suffered a serious decline and the price action since March does not reflect enough aggressive buying to give me confidence on the long side. Avoid SPG for now. Stick with stocks that have rallied strongly from their March lows.