The real estate investment trust that invests in carrier-neutral data centers and provides colocation and peering services, CoreSite Realty Corp (NYSE: COR) seems to be poised for a decline in its price in the near term as per its latest charts.
Bearish Indications
#1 Below Resistance Area: The daily chart shows that the stock is currently trading below a long-term resistance area. This area is marked as an orange color dotted line. Despite multiple attempts, the stock was unable to sustain a breakout above this level. This indicates that there is a distribution happening at this level, which is a possible bearish indication.
Daily Chart – COR
#2 Bearish Candle: The latest candle in the daily is a bearish doji candle with a high volume. This is marked as a pink color ellipse.
The formation of a doji candlestick pattern indicates indecisiveness among buyers and sellers.Once the stock closes below the close of the doji, it usually foretells the beginning of a downtrend.
#3 MACD below signal line: The MACD line (blue color) is currently below the MACD signal line (orange color) in the daily chart, indicating an overall bearishness of the stock.
#4 CCI Moving Down: The CCI is currently moving down after attempting to cross above 100.
This usually means that the stock may reverse to the downside soon.
#5 Bearish Stoch: The weekly chart shows that the stochastic is currently near overbought levels and moving down. The %K line has also crossed below the %D line. All these indicate possible bearishness.
Weekly Chart – COR
#6 Bearish ADX and DI: The ADX and DI indicate bearishness in the weekly chart. This is because (+DI) < (-DI); ADX and (-DI) are above (+DI); and ADX has moved up from below both (+DI) and (-DI). All these points to possible bearishness.
#7 Supply area: The weekly chart shows that the stock is currently near a supply area, as it was not able to cross above the resistance level even after multiple attempts. This indicates possible bearishness.
#6 Bearish CCI: The CCI is currently moving lower after reaching overbought levels in the weekly chart. This indicates possible bearishness.
Recommended Trade (based on the charts)
Sell Levels: If you want to get in on this trade, the ideal sell level for COR is below the price of $120.
TP: Our target prices are $110 and $100 in the next 3-6 months.
SL: To limit risk, place a stop loss at $126.00. Note that this stop loss is on a closing basis.
Our target potential downside is 8% to 17% in the next 4-6 months.
For a risk of $6.00, our target rewards are $10.00 and $20.00. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 3x rewards compared to the risks.
Risks to Consider
The stock may reverse its overall trend if it breaks upwards from the resistance area with high volume. The breakout of the stock could also be triggered in case of any positive news, overall strength in the market, or any regulatory changes in its sector.
Happy Trading!
Tara
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