Pebblebrook Hotel Trust, through Pebblebrook Hotel, L.P., operates as a real estate investment trust. The company acquires and invests primarily in hotel properties located in the United States. It holds interests in the Doubletree Bethesda Hotel and Executive Meeting Center located in Bethesda, Maryland; Sir Francis Drake Hotel located in San Francisco, California; and InterContinental Buckhead Hotel located in Atlanta, Georgia.
Take a look at the 1-year chart of Pebblebrook (NYSE: PEB) below with my added notations:
Over the past 4 months, PEB has been climbing higher and higher. During that time, the stock had also formed a nice trend line of support (red). Always remember that any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. PEB’s trendline seemed to have been important. Late last week, the stock broke that trendline, and could be moving lower overall, especially if the $32 support level (green) were to break as well.
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The Tale of the Tape: PEB has broken below trend line support, and currently sits on its $32 support. A short position could be entered on a rally up to the trendline, or on a break below $32. A long position could be made at $32 if traders are bullish on the stock.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT