Last up is Realogy Holdings (RLGY), a $7 billion real estate broker. Despite major tailwinds in the real estate space this summer, RLGY is looking toppy. Here's how to trade it.
RLGY is currently forming a head and shoulders top, a price pattern formed by two swing highs that top out at approximately the same level (shoulders), separated by a higher high between them (the head). The sell signal comes on a breakdown below the neckline, which is right at $44 for Realogy. Momentum adds some extra confidence to RLGY's downside setup -- 14-day RSI has been in a downtrend since February that steepened at the start of the summer.
Lest you think that the head and shoulders is too well known to be worth trading, the research suggests otherwise: a recent academic study conducted by the Federal Reserve Board of New York found that the results of 10,000 computer-simulated head-and-shoulders trades resulted in "profits [that] would have been both statistically and economically significant." Keep an eye on that $44 neckline this week.To see this week's trades in action, check out the Technical Setups for the Week portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore.
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