Semiconductors offered off on Tuesday, crushing the Expertise sector. However the Actual Property sector did not undergo an identical destiny; actually, it was the highest sector performer for the day. 

The Actual Property Choose Sector SPDR Fund (XLRE) reached a 52-week excessive in mid-September, however has pulled again since then. Nonetheless, Tuesday’s worth motion means that XLRE could also be on the verge of recovering from correction territory. Certainly one of XLRE’s prime holdings is American Tower Corp (AMT), which occurs to be within the prime 5 within the Massive Cap Prime Up StockCharts Technical Rank (SCTR) class.

FIGURE 1. SCTR REPORT FOR OCTOBER 15, 2024. American Tower (AMT) was within the prime 5 within the Massive Cap Prime Up class.Picture supply: StockCharts.com. For instructional functions.

AMT operates and leases mobile towers to a number of carriers. As bond yields fall, cell tower Actual Property Funding Trusts (REITs) profit from decrease borrowing prices. And when rates of interest decline, AMT’s 2.8% dividend yield could also be one more reason to personal the inventory.

Technically Talking

the weekly chart of AMT (see beneath), the inventory worth is buying and selling above its 26-week easy transferring common (SMA) and is attempting to remain above its 61.8% Fibonacci retracement stage. Its SCTR rating is simply above 70, and the relative power index (RSI) is trending greater towards 70.

FIGURE 2. WEEKLY CHART OF AMERICAN TOWER STOCK. The inventory worth is gaining momentum, so keep watch over the symptoms to make sure momentum remains to be sturdy sufficient to take the inventory worth greater.Chart supply: StockCharts.com. For instructional functions.

The more moderen sequence of upper highs and better lows is a sign that the pattern may proceed to go greater. Let’s examine what story the each day chart of AMT tells.

FIGURE 3: DAILY CHART OF AMERICAN TOWER STOCK PRICE. The breakout above the 50-day SMA, a possible MACD crossover, and rising OBV all assist an upward transfer in AMT.Chart supply: StockCharts.com. For instructional functions.

After bouncing above a assist stage (blue dashed line), the inventory worth crossed above its 50-day SMA. It will have to point out a sequence of upper highs and better lows to assist the upward pattern in worth. There must be momentum for that to happen, and two good indicators to gauge the momentum are the transferring common convergence/divergence (MACD) and On Steadiness Quantity (OBV).

The MACD line may quickly cross over the sign line just under the zero line. The nearer the crossover is to the zero line, the extra assured I really feel in regards to the sustainability of the uptrend.

In the meantime, an OBV crossover above its 50-day SMA would additional verify the uptrend in AMT. 

If the worth motion follows by way of on the upside, AMT may attain its September 10 excessive, after which its all-time excessive could be the subsequent vacation spot. The weekly chart exhibits a number of clear resistance ranges alongside the best way.

The one concern is {that a} head-and-shoulders prime may type on the weekly chart. If that had been the case, worth may fall beneath the 50% retracement stage and 26-week SMA.

Buying and selling AMT

I would not enter the commerce till the worth exceeds $234.50 (left shoulder). That provides it time to show a sequence of upper highs and better lows on the each day chart. I’d place a good cease beneath my entry level and keep within the commerce if the momentum stays sturdy. The primary goal could be the 52-week excessive. If it exceeds that, I’ll journey the pattern for so long as potential. As soon as the momentum begins waning, I would exit my place.

If worth strikes in the wrong way, i.e. if a head and shoulders prime is fashioned on the weekly chart, all bets are off. I would delete this chart from my ChartList. There are many different alternatives.

The underside line: Set an alert for when AMT crosses above $234.50. Whenever you get the notification, head over to the weekly and each day charts of AMT, which ought to be saved in considered one of your ChartLists, and revisit the symptoms. Are they nonetheless exhibiting bullish momentum? In that case, enter a protracted place, however know the place your stops are earlier than you place the commerce.

Disclaimer: This weblog is for instructional functions solely and shouldn’t be construed as monetary recommendation. The concepts and techniques ought to by no means be used with out first assessing your individual private and monetary scenario, or with out consulting a monetary skilled.