Todays Big Stock: Simon Property Group, Inc. (NYSE: SPG)

Although I do believe that the stock market has re-entered the larger bear market that started in 2007, the current round of selling is getting a little long in the tooth. Traders should be prepared with stocks that will provide clear entry points for when they believe that the market has bottomed. For example, one stock that has multiple levels on the way down is that of Liberty Global Inc.

Simon Property Group, Inc. is a real estate company. Simon Property owns or has an interest in 392 retail real estate properties, including regional malls, Premium Outlets, The Mills, community/lifestyle centers and international properties comprising 263 million square feet of gross leasable area in North America, Europe and Asia. The company is headquartered in Indianapolis, Indiana.

Before discussing a potential trading opportunity with SPG (Simon Property Group, Inc.), please review the 1 yr. chart of SPG that I have outlined below, with my added notations:

Yesterday, SPG broke a very important level at $110 (red). After breaking that support, the stock should be moving lower from here. The good thing about SPG is that it also has potential levels at $105 (teal), $100 (pink) and $95 (blue). When the market appears to have found its footing, a trader might want to make a trade at whichever of those levels that SPG is testing at that time.

The Tale of the Tape: SPG has broken a key level at $110 and should be moving lower. Regardless of where the market settles down, SPG provides a long entry at $95, $100 or $105. Volatility is elevated and identifying a bottom is certainly a tricky prospect. So, stops should be placed below the level of entry.

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!

Good luck!
Christian Tharp, CMT