More on Herman Cain’s Hotel Preferences
- Posted by Greg Harmon
- on November 29th, 2011
Herman Cain called me back last night after in an effort to come clean about why he picked Starwood Hotels & Resorts, $HOT, as his top Hotel. Yes he stands by his previous statements (link below) but he remembered something else. He used to frequent Wyndham Worldwide, $WYN, hotels until a ‘situation’ developed. He did not elaborate, but I heard his aide in the background say something about Wolf Blitzer on the other line and then he was off. I guess he is a busy man. Well, with that information I took a look at the ratio chart of $WYN against $HOT and it was obvious that he had changed preferences. Take a look.
The ratio chart above shows that after pulling back to a bottom in October at 0.62 it rose to 0.76 last week forming a Double Top. With the Relative Strength Index (RSI) pulling back from a technically overbought condition and a Moving Average Convergence Divergence (MACD) indicator that is stalled and fading, it looks like there is downside to come in this ratio. A shift from $WYN into $HOT. Further the Shooting Star candle creating the Double Top last Friday was confirmed with a lower doji Monday on large relative volume. This presents a trade idea.
This trade risks $2.62-$2.66 to make $8.37-$8.99 or a reward to risk ratio of 3.15:1 on the worst case comparison.
If you want to know how I would trade this names or for more ideas and deeper analysis, use the Get Premium button above. As always you can see details of individual charts and more on my StockTwits feed and on chartly.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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