AvalonBay Communities, Inc. : Short on real estate
Entry price | Target | Stop-loss | Potential |
---|
$140.15 |
$0 |
$142.6 |
+100% |
---|
AvalonBay Communities is a real estate investment trust. The company develops, redevelops, acquires and manages high-quality apartment communities in the high barrier-to-entry markets of the United States.
At current price the stock is strongly valued, it is trading at 39x according to Thomson Reuters’ 2012 earnings per share estimate. The strong valuation is underlined by enterprise value revenues ratio of 16x. At this level price the share is more expensive than average sector.
Since early of the year the share gained nearly 8.5%, modestly outperforming the S&P 500. The stock is testing the long term resistance; especially in weekly data is since several weeks, the share try to cross this level but is always failed. This resistance is very important psychological threshold and might lead the share towards USD 136, 50-periods moving average area. Both financial and technical pattern suggest to take a short position. A stop-loss is necessary at USD 142.6 in order to cover the position.
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