This article was first posted on SharesInvestment on 12 July 2010.
Hotel Properties Ltd has emerged from a 10-month long consolidation. Price made a new 52-week high last month and is considered a bullish development especially since it is above all of its moving averages.
The chart shows a horizontal base-building period from September 2009 to June 2010. During this time, price traded between $1.97 and $2.50. Each period of rally was accompanied by high volume while low volume matched price decline. This is a suggestion that there might be accumulation. Price break out in June to new validates this observation.
With the June rally behind, price retraced to the $2.50 region. Bullish investors who were left out of the rally will be looking for entry levels. Look at this level keenly because here technical traders expect the former resistance to become support. Price has to stay above $2.50 to remain bullish.
Be careful though, a dip could take price to mid-April high as well. And if it goes down a lot further, then the brief fling above $2.50 (hypothetical) will become just an act of distribution.
HPL moves out of range
