China Lodging: time to check out? Downgraded to bearish
Previously
rated as bullish (1)
Price
and moving averages:
HTHT(China
Lodging) has closed above its short term moving average. Short term moving average is currently above mid term, and above long term moving averages.
Mid term moving average is currently below long term
The
relationship between price and moving averages is: bullish in short term, and
neutral to cautionary in mid-long term.
Despite
the short term and mid term tops on recent closes, the rest of our GURU
indicators are weighing in heavier toward the bear side. Combining the falling
MACD and GURU stochastics with the narrowing of the Bollinger bands, this could
go worse quickly. The technical situation is precarious at this point.
Bollinger
Bands:
HTHT(China
Lodging) has closed below upper band by 43.3%. Bollinger Bands are 65.1% narrower than normal.
The narrow width of the bands suggests low volatility as compared to HTHT(China Lodging)'s normal range. Therefore, the probability of volatility increasing with a sharp price move has increased for the near-term. The bands have been in this narrow range for 1 bars. The probability of a significant price move increases the longer the bands remain in this narrow range.
While
not a hard rule, often the stock breaks down when trending above mid point in
an environment of narrowing volatility.
CCI is now in neutral
range with a reading of 23.4 and no signals in several days
MACD
Crossovers:Currently MACD is bearish since it is trading below its signal line.
MACD crossed below its signal line 2 period(s) ago.
Since MACD crossed its moving average, HTHT's price has increased 2.63%
and has ranged from a high of 25.13 to a low of 24.16
Overbought/Oversold:
MACD is not in an Overbought/Oversold range.
Divergence:
There have been no divergence signals within the last 5 periods.
Current
rating is -1.5
Tech
ratings are 3 to -3 indicating bullish to bearish; a zero is neutral to
cautionary.
This
commentary is not a recommendation to buy or sell. Use at your own risk.
Disclosure:
the firm does not currently hold a position in this stock and has no plans to
create a long or short position over the next 5 business days.
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