Boston, MA 10/04/2013 (wallstreetpr) – Host Hotels and Resorts Inc (NYSE:HST) (Closed: $17.65, Down: 2.54%) opened flat but kept falling from the opening bell itself. It gobbled up all the gains made in the previous 3 sessions and created a very bearish long range candle. The volume at 7 million was just a bit higher than the average volume of 6 million.
The indicators are yet to give any firm signal despite a bearish bias. The daily RSI & MACD both have shown negative divergences at the last high of $19.03. The warning signal comes from the failure of the daily RSI to get above 70 levels since March 2013. The MACD Histogram is already in the negative territory on the daily timeframe and the weekly timeframe doesn’t inspire any confidence too. The weekly indicators have been contracting and languishing in the middle zone with the price but the last higher high of the price obviously produced a negative divergence there too.
The biggest warning signal comes from the price itself. It had topped out at $28.98 in the early phase of the general bear market, in February 2007, when most of the stocks were still on the way to their respective tops. A 25 months straight decline brought it to the low of $3.08 by early 2009. The first rally that took place faced rejection from exactly 2/3rd or 66.6% retracement level of the entire fall from the 2007 top to the 2009 bottom. After a correction of that rally, the price is back to the highs again but getting resisted at exactly the 61.8% retracement level of the same fall mentioned above.
On the weekly charts, the price broke above the multiple tops made in May – August 2013, but after a spike closed much lower. This is called a Pinocchio Bar by Martin Pring and it implies bear domination. Investors could exit the stock for now if it gets below $16.80.
