Over the past few months, a key level of resistance has formed in the chart of Host Hotels & Resorts (HST). If this level is to be surpassed, a breakout could occur.
HST owns over 80 predominantly urban and resort upper upscale and luxury hotel properties representing over 47,000 rooms, mainly in the United States. The majority of Host’s portfolio operates under the Marriott and Starwood brands.
The company reported earnings earlier this month and both earnings and revenue were down considerably year over year. The pandemic and restrictions on travel are affecting performance. As COVID cases continue to soar, it isn’t likely to change anytime soon.
While HST had $2.4 billion in cash at the end of the third quarter, long-term debt was at $6.3 billion. Although the company has a very high current ratio of 14.9, indicating it can cover its short-term obligations.
While sales are down considerably, analysts expect revenue to rise 58% next year. The company has a Price to Sales ratio of 3.5, which is much higher than the industry average and the S&P 500.
HST has shown bearish long-term momentum, but very bullish near and mid-term performance. The mixed performance has led a “Neutral” rating in our POWR Ratings system.
Take a look at the 1-year chart of HST below with my added notations:
Chart of HST provided by TradingView
During the past several months, HST has formed a key level of resistance at the $15 (red) area. The stock has tested that level three times since the stock’s March drop, and now seems to be headed back up that way again.
A solid close above $15 should lead to higher prices for HST. Therefore a long trade could be entered on a breakthrough of that level.
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Christian Tharpe, CMT
HST shares rose $0.75 (+5.66%) in premarket trading Monday. Year-to-date, HST has declined -23.71%, versus a 13.97% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp, CMT
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock. More…
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