Choice Hotel’s is Kicking It!

Hotel’s were touted as the soothsayers of economic activity just a few weeks ago on April 18, when Marriott International, $MAR, reported earnings. What has happened since then? Take a look below.

Marriott International, $MAR

Six weeks later the global economy is also not nearly as rosy. Marriott peaked 2 weeks after reporting and it has now tested support from the March gap higher for the third time, filling that gap. The charts for Hyatt, $H, Starwood, $HOT and Wyndham, $WYN are all similar. All printed Hammer candlesticks today at support that could signal a reversal if confirmed higher tomorrow. Otherwise they remain in a downtrend. But one hotel chain, Choice Hotels, $CHH, is very different. Notice on the the chart below that the last two days the stock has opened at nearly the same price. Friday it moved lower all day closing near the low. But Monday it moved higher closing near the high. This is called a Bullish Kicker pattern and it can be very powerful. It has supporting technicals for more upside as well. The Relative Strength Index (RSI) is making a new higher high, the Moving Average Convergence Divergence (MACD) indicator has been trending higher and is positive, and volume was strong on the Monday candle. Further Monday’s candle was a near Marubozu, which is also a bullish one day candle pattern. A move only slightly higher than Monday’s close, above 36.85, puts it on a path to retest the previous highs near 39.

Choice Hotels, $CHH

Disclosure: At the the time of publishing this I am short $MAR using Puts and have no position in $CHH.

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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.

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