Hi Folks,
This is a pretty simple set up here. We have a huge base on PSA going back to March 2016. The previous highs from that time are presenting textbook resistance in my opinion. I believe that PSA will break out and there's an opportunity in the setup. Here's my thesis:
The XLRE has being showing relative strength to the S&P the last three months and has really come on in the last month as a leader. Not surprisingly, the XLRE just broke through it's pre-covid crash highs. PSA is a top holding in the XLRE and could follow suit and breakthrough as well. If you believe the recent strength in the XLRE can be sustained, then it's top holdings would most likely lead the way.
PSA is Public Storage. They recently bought a smaller competitor EZStorage demonstrating the need to expand and showcasing the current demand for storage units. Moreover, PSA stands to benefit from the current housing market up cycle as people are moving all over the country and are storing items as needed. Anecdotally, I live in a major metro-area and a brief search of all the area PSA sites show low or now availability of all sized units.
Earnings are reported tomorrow and could provide the catalyst needed to punch through resistance. If resistance is broken I think the stock can rally to about $314 in the near term.
If the stock fades from it's current levels and fails to break resistance then the thesis is no good and the trade should be abandoned.
Disclosure: I am long PSA.
Anyway, what do you all think?
PSA
SPY
XLRE
This is a pretty simple set up here. We have a huge base on PSA going back to March 2016. The previous highs from that time are presenting textbook resistance in my opinion. I believe that PSA will break out and there's an opportunity in the setup. Here's my thesis:
The XLRE has being showing relative strength to the S&P the last three months and has really come on in the last month as a leader. Not surprisingly, the XLRE just broke through it's pre-covid crash highs. PSA is a top holding in the XLRE and could follow suit and breakthrough as well. If you believe the recent strength in the XLRE can be sustained, then it's top holdings would most likely lead the way.
PSA is Public Storage. They recently bought a smaller competitor EZStorage demonstrating the need to expand and showcasing the current demand for storage units. Moreover, PSA stands to benefit from the current housing market up cycle as people are moving all over the country and are storing items as needed. Anecdotally, I live in a major metro-area and a brief search of all the area PSA sites show low or now availability of all sized units.
Earnings are reported tomorrow and could provide the catalyst needed to punch through resistance. If resistance is broken I think the stock can rally to about $314 in the near term.
If the stock fades from it's current levels and fails to break resistance then the thesis is no good and the trade should be abandoned.
Disclosure: I am long PSA.
Anyway, what do you all think?
PSA
SPY
XLRE