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Technicals Turn Negative on This Real Estate Play, According to Financial Site Penny Stock Detectives(June 04, 2012)
New York, NY (PRWEB) June 04, 2012
Sasha Cekerevac, contributor to financial newsletter and web site Penny Stock Detectives, points out that, when it comes to investing in real estate, many people have chosen to put their money in stocks that operate and develop properties. This way, you are able to get a diversified portfolio instead of having all your money tied up in one property. As reported in his recent Penny Stock Detectives article, Cekerevac believes that one success story, Thomas Properties, which owns, develops and manages a diversified portfolio of properties, is now in a corrective phase.
Recently, the company released its financial results for the quarter, comments Cekerevac. After-tax cash flow came in at $1.7 million compared to $1.8 million in the same period the year prior. But following the results, the stock sold off.
Cekerevac believes that an investor who was watching the technicals could have seen the sell-off coming.
Nothing in life goes in a straight line. The best stock doesnt move up every day forever, just like the best baseball hitter doesnt hit the ball every time. At some point, the move in the stock gets exhausted.
The first item to note about this stock, according to Cekerevac, is that it was massively overbought, as denoted by the Relative Strength Index (RSI). This condition does not mean the stock will sell off right away, but it does raise the red flag that at some point the move will run out of steam. This in itself is not enough to sell or short the stock, says Cekerevac. The editor points out that Thomas Properties stock did exceed the highs in March, but with additional warning flags.
One of the better ways to read technical analysis is through divergences, according to Cekerevac. Divergences in technical analysis indicate that the underlying strength is lacking. In this case, while the stock price made a new high in late April, both the RSI and the moving average convergence/divergence (MACD) line did not, he points out. In technical analysis, this indicates that the underlying strength is weak and the move to new highs has a high probability of failing.
According to Cekerevac, once the stock broke its 50-day moving average, this was just one too many negative factors and the selling accelerated. Technical analysis is not about finding one magic indicator, says Cekerevac; its about telling the story of what investors are doing with their money. Truth is in the stock price.
Published every business day, Penny Stock Detectives researches and analyzes low-priced opportunities in the stock market and individual stock market sectors. Penny Stock Detectives reports on penny stocks, small-cap stocks, micro-cap stocks, high-profit potential plays mostly under $10, and the stock market in general.
To see the full article and to learn more about Penny Stock Detectives, visit http://www.pennystockdetectives.com.
The editors of Penny Stock Detectives believe low-priced stocks, when researched properly, present investors with great opportunities to accumulate wealth and to increase the value of their investment portfolios. You can learn more about Penny Stock Detectives at http://www.pennystockdetectives.com.
Sasha Cekerevac, BA, and Danny Esposito, B. Comm., lead editorial stock analysts at Penny Stock Detectives, in conjunction with stock market guru George Leong, B. Comm., have just updated their breakthrough video, If You Missed Apple, Shame on Us; If You Miss Thiswhich highlights a company these stock analysts believe looks very similar to Apple Inc. in its early days. To see the video, visit: http://www.pennystockdetectives.com/video/pt/index.php?sb=PRESS.
Read the full story at http://www.prweb.com/releases/2012/6/prweb9566412.htm.
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