Kilroy Realty Corporation is a privately owned real estate investment trust. The firm engages in investment, development, and management of properties. It invests in the real estate markets of Southern California. The firm’s portfolio includes office, industrial, R&D, and multi-purpose properties. The company was founded in 1947 and is based in Los Angeles, California.
Take a look at the 1-year chart of Kilroy (NYSE: KRC) below with my added notations:
KRC has formed a clear support level at $72 (green) over the past 4 months. In addition, the stock is declining against a short-term, downtrending resistance level (red). These two levels combined have KRC stuck within a common chart pattern known as a descending triangle. Eventually, the stock will have to break one of those two levels.
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The Tale of the Tape: KRC is within a triangle formation. A short trade could be made on a break of support or on a test of resistance. A long trade could be made at support or on a break through the triangle resistance.
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
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