Revolving Doors at the Hotel Entrance
- Posted by Greg Harmon
- on March 7th, 2012
Some stocks in the Hotel space have been experiencing early check outs where others seem to be sold out every day. Is there a difference between the winners and loser or just a revolving door with one group leading the other. Lets take a look at the technicals.
Full to Capacity
Marriott International, $MAR
Marriott International, $MAR, seems to firing on all cylinders. After breaking above the critical 34 level it has retested it twice and moving higher. But it is starting to show signs of fatigue. The price and Relative Strength Index (RSI) both made a lower high, and the Moving Average Convergence Divergence (MACD) indicator looks ready to move back negative after making it back to zero. Maybe the bookings are drying up. A move under 35.50 will confirm a bias to the downside toward the 34 line again.
Wyndham Worldwide, $WYN
Wyndham Worldwide, $WYN, spent the last two weeks building a bull flag before a hiccup Tuesday and consolidation Wednesday. The Bollinger bands are getting very tight, foreboding a move as well. The MACD and RSI suggest that the move will be lower. Cracking 42.80 bring support lower at 41.55 and 39.65 into play.
Looks like maybe the strong hotels are ready to follow the weaker ones lower. But what about the weak ones?
Early Check Outs
Hyatt Hotels, $H
Hyatt Hotels, $H, has been trending lower since the beginning of February. But Wednesday it printed a strong upward candle with a turn higher in the RSI off of the bottom from Tuesday. It is still early to call a reversal but a continued move higher over the Doji from Monday and the 50 day Simple Moving Average (SMA) at 40.96 will likely have traders booking lots in their portfolios.
Starwood Hotels & Resorts, $HOT
Starwood Hotels & Resorts, $HOT, is in a similar position falling since the beginning of February. Now consolidating at the 50 day SMA a move back over 54 will put it back in favor.
So the weak ones are not home free yet but showing some signs of life. Keep your eye on this relationship. There may be a pairs trade here.
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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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