SL Green Realty May Have Bottomed
Commercial real estate struggled for more than a year as interest rates rose. But now there may be signs of a turn in one of the most actively traded names: New York office-building owner SL Green Realty.
The first pattern on today’s chart is the price action on October 31 and November 1. SLG dipped under the previous week’s low on an intraday basis before rebounding. It then jumped to end Friday at its highest level in 12 sessions. The result was a bullish outside week, which can signal an upside reversal.
Second, the 50-day simple moving average (SMA) has been above the 200-day SMA since August. Is the longer-term trend getting more positive?
Third, the recent bounce has left the stock somewhat overbought. Buyers may watch for potential chopping between $32 and $33, which is near the 8-day and 21-day exponential moving averages (EMAs).
Speaking of the 8- and 21-day EMAs, the faster EMA is rising toward the slower EMA. (See our 2 MA Ratio custom script in the lower study.) A potential crossover may signal more bullishness in the near term.
Finally, the bigger issue for SLG could be the macro environment of interest rates. SLG has a large debt load and trades at a discount to book value. It also carries a heavy short interest. Further easing of conditions could make bears think the worst of the crisis has passed and lead them to unwind downside positions.
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Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
The first pattern on today’s chart is the price action on October 31 and November 1. SLG dipped under the previous week’s low on an intraday basis before rebounding. It then jumped to end Friday at its highest level in 12 sessions. The result was a bullish outside week, which can signal an upside reversal.
Second, the 50-day simple moving average (SMA) has been above the 200-day SMA since August. Is the longer-term trend getting more positive?
Third, the recent bounce has left the stock somewhat overbought. Buyers may watch for potential chopping between $32 and $33, which is near the 8-day and 21-day exponential moving averages (EMAs).
Speaking of the 8- and 21-day EMAs, the faster EMA is rising toward the slower EMA. (See our 2 MA Ratio custom script in the lower study.) A potential crossover may signal more bullishness in the near term.
Finally, the bigger issue for SLG could be the macro environment of interest rates. SLG has a large debt load and trades at a discount to book value. It also carries a heavy short interest. Further easing of conditions could make bears think the worst of the crisis has passed and lead them to unwind downside positions.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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