Regency Centers Corporation operates as a real estate investment trust. The company, through its subsidiaries, owns, operates, and develops community and neighborhood shopping centers that are tenanted by grocers, category-leading anchors, specialty retailers, and restaurants. As of December 31, 2006, it owned 218 retail shopping centers located in 22 states and held partial interests in 187 retail shopping centers through joint ventures located in 24 states and the District of Columbia.
Take a look at the 1-year chart of Regency (NYSE: REG) below with my added notations:
REG has been trending consistently higher all year, and during that time the stock has formed a clear trendline of support (blue). In addition, the stock has also created at 52-week high resistance level at $85 (red) over the past month. At some point REG is going to have to break one of those two levels.
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The Tale of the Tape: REG has a $85 resistance and a trendline of support. A long trade could be made on a pullback down to the trendline, or on a break above resistance, with a stop placed below the level of entry. A break below the trendline could be an opportunity to get short the stock.
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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