Trading Ichimoku

My MACD readings is a bit rusty. So, take it with a pinch of salt.

The following chart uses 2 indicators to determine a short entry.

1. 20 day MA

2. MACD histogram

Some points to note:

1. ARE has been trading at a lower range. Look at the boxes drawn. It is still not clear if the new range is between $31 and $35.

2. Yesterday, closing provides a clearer picture that it is now being resisted by the 20day MA. In fact, if I recall, yesterday ARE was ‘up’ till the later hours of the day. Perhaps, a sign that the bulls are getting exhausted.

3. MACD. A possible MACD bearish cross. I also counted 4 consecutive green MACD histogram.  If a red histogram appears, that is my signal to short. (4green histogram followed by a 1 red histogram)

NOTE:

Reminder: My MACD readings are ‘rusty’. Perhaps, others can comment if my reading is right.

I have been bearish on various REITs for quite some time. The key reason is the amount of leveraged they have.

Surely, in this economic climate, financial institutions will be cutting back and reducing their lending exposures

With this in mind, highly leveraged REITs will faced significant challenges in raising funds to finance their borrowings.

For more in depth reads on such issue, try searching for Morningstar, Seeking Alpha and of course, Stripnomics.com via Google.

One of a possible short position which I have attempted is on  ARE.

From a technical analysis point of view, ARE  has just broke its long term support at around $32.

You can look at the chart here. For the past few sell down, it was able to hold at that level. But, last few trading days sees the support being broken and till Friday, it did not manage to clear that level.

Will this be the beginning of  a major slide for ARE?

Take a look at the chart:

http://stockcharts.com/h-sc/ui?s=ARE&p=D&yr=1&mn=0&dy=0&id=p57283514494

Look at the volume that is associated with that price level. History suggest that there’s volume supporting it at around $32 range.

But, a further break down will suggest that this price level will not hold.

As posted yesterday, Alexandria Real Estate (ARE) cuts dividend.

With its fundamentals deteriorating, the chart is showing more promises on the short side.

1. For this chart, I am relying solely on Chikou Span (green lines) to identify the support-resistant levels. This is because the Tenkan sen and the Kijun sen has been ‘screwed’ by a trade that goes to $66 a couple of weeks back. Good thing, Chikou Span keeps its sanity and provide the required information.
2. Here we can see that  ARE hit the first resistant at $42 and turn. That does not mean much. But, I always pay attention when things turn.
3. With yesterday’s news, ARE has a gap down and a major sell down on high volume. Along the way, it break through the $37 support level.
4. Stochastic also shows a bearish cross with the major trend still down.
5. I will be watching the US$33 support level. It has been supported on that level for a few times. And it may well be supported again until there are new developments that says otherwise.