Extra Space Storage, Inc. is a self-administered and self-managed real estate investment trust. The company owns, operates, manages, acquires, develops and redevelops professionally managed self-storage facilities. By the end of 2011, Extra Space Storage Inc. held ownership interests in 697 operating properties. Of these operating properties, 356 are wholly owned, and 341 are owned in joint venture partnerships. An additional 185 operating properties that are owned by franchisees or third-parties in exchange for a management fee, bringing the total number of operating properties, which it owns and/or manages to 882. The company operates in three segments: property management, acquisition and development; rental operations, and tenant reinsurance.
To review Extra Space’s stock, please take a look at the 1-year chart of EXR (Extra Space Storage, Inc.) below with my added notations:
After bottoming at $18 in October of last year, EXR has been in a steady up trend ever since. While moving higher, the stock has formed a nice trend line of support (navy). Always remember that any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. So, as you can see, EXR’s trend line support is very important. Last week the stock broke that level of support and should be moving lower overall from here.
The Tale of the Tape: EXR had created an up trend line of support over the last (7) months. Since that the support has broken, a short position could be entered now or on a rally back up to the previous trend line.
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