Simon Property Group, Inc. operates as a self-administered and self-managed real estate investment trust. It owns, develops and manages retail real estate properties, which primarily consist of regional malls, premium outlets and mills.
Take a look at the 1-year chart of Simon (NYSE: SPG) with the added notations:
During the past five months, SPG had formed a very important level of support at $143 (red). Yesterday saw the stock break below that support. Not only does that imply lower prices for SPG, but the $143 area will likley act as resistance on any future rallies.
The Tale of the Tape: SPG broke a key level of support at $143. A trader could enter a short position on any rallies up to or near $143 with a stop placed above the level. If the stock were to break back above the $143 level, a long position might be entered instead.
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