Last week, the analysis of American Tower Corp., signed off with this:
“The expectation for the coming week; AMT continues its reversal and takes the IYR sector with it.”
The chart above was provided to support that analysis.
The chart below shows the result:
So, AMT met expectations by reversing on cue. Did it take the rest of the market (IYR) with it? Before that’s addressed, let’s look more at AMT.
The 3-Point P&F chart is shown below with projected targets.
For over a hundred years, this is how P&F charts are used to identify potential.
Price action indeed, met the target and then reversed.
What’s more, we can see AMT bounced off the top of the projection (~216) area first, then came back to the target.
AMT then went on a counter-trend move to ~238, before again, reversing lower last week … which brings us to now.
Stated several times in these updates, if and when IYR reverses, because of its own price action, it will create even lower targets.
A good illustration is to use AMT:
Now that its moved lower, met targets, rebounded only to reverse again, we have a new projection.
When and if IYR reverses, it will create similar downside targets.
The daily chart (below) has AMT price action overlaid with Fibonacci projections to lower levels.
It might be a little hard to see but Friday’s action bounced off (exactly) at the 23.6%, projection.
What this means is, AMT price action is “respecting” the Fibonacci level.
That gives high probability the level is valid. If we really are in a continued AMT reversal, now we have high probability downside targets.
Tying this all together and using the weekly chart of AMT (with the Fib targets) we get this:
Note how the 1:1 projection (shown as 100.0) is near exact at the March 2020, low of 174.32.
Price action itself defines what levels are important.
The ultimate P&F projection of 84 – 117, is far below what’s shown on the weekly chart.
However, AMT: 77 – 78, does correspond to Fibonacci projection at 261.8%, … very near the ’84’ P&F low.
There’s a lot more to AMT and IYR but the post has gone on long enough.
There’s also no guarantee AMT and IYR will meet any projected levels. That is the way of the markets.
However, what’s being done is to (continue to) present a significant case for long-term sustained downside reversal; carrying the real estate sector to levels (ultimately) below that of 2009.
Charts by StockCharts