Philadelphia-based shopping center owner Pennsylvania REIT (PEI - Get Report) is forming a very different setup right now, and you don't need to be an expert technical analyst to figure out what's going on in shares of this billion-dollar commercial landlord. PEI is currently forming an uptrending channel, a trading range that's bounded by a trendline resistance and trendline support level.
Those support and resistance levels give us a high probability range for PEI's stock to trade within. And as you might expect, the ideal time to be a buyer is on a bounce off of support.
When you're looking to buy a stock within a trend channel, buying after a bounce off of support makes sense for two big reasons: It's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). Keep that in mind when putting in a stop loss in PEI; the 200-day moving average looks like a good dynamic level for a stop.For a tighter stop, I'd recommend exiting if shares move below their most recent swing low at $17.50.