Vornado Realty Trust (NYSE: VNO)

Vornado Realty Trust is a publicly owned real estate investment trust. The firm invests in the real estate markets of the United States. It makes investments in commercial real estate properties to create its portfolio.

Take a look at the 1-year chart of Vornado (NYSE: VNO) below with my added notations:

Over the past 4 months, VNO has created a key level of support (green) at $73, which is also the “neckline” for the stock’s potential head and shoulders (H&S) continuation pattern. Above the neckline you will notice the H&S pattern itself (red).

Confirmation of the H&S would occur if VNO were to break the support, and lower prices would be expected from there.

The Tale of the Tape: VNO has formed a head & shoulders pattern. A long trade could be made at $73 with a stop placed below that level, but ideally, the pattern implies a short trade to be entered on a break below that level instead.

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