NEW YORK (Real Money) -- The Wyndham of change is blowing through the lodging industry. Although I'm looking at the chart of Wyndham Worldwide (WYN), we could see similar bearish setups in Hilton Worldwide (HLT - Get Report), Marriott International (MAR - Get Report) or Starwood Hotels & Resorts (HOT).
Wyndham has struggled since late April. While the stock has bounced around for the past 3 months, the lower lows paired with slightly higher highs has created a bearish megaphone pattern.
The chart looks to be opening up additional downside, with new resistance established in the $83 area. The most recent push higher brought the Relative Strength Index (RSI) back to life. At first, it looked like a bullish divergence, but the attempted breakout failed. Price was turned back at resistance while the RSI retreated back into bearish territory. The Vortex Indicator (VI) is widening further into bearish territory. A possible small bounce tried to set up in the Slow Stochastics a few days ago, but this also looks to be failing. Wyndham looks set up to test the mid-$70s based on the daily view.
The weekly chart could offer a few different plays, here. First, this pullback may be nothing more than a bull flag after a huge run from late 2013 through early 2015. If that is the case, then a weekly close over $85 should trigger the next step higher. The problem is support is around $80 -- and we're not too far away from that level this week.
In the past, the RSI still held strong, but now we see an RSI making new lows while price is nowhere near a new low. This bearish divergence is troublesome. There are similar issues right now with the Slow Stochastics and Vortex Indicator. The only thing bullish I see, here, is potential: the potential to break out around $85. If $80 fails, the downside looks to be around $73.
Overall, this is a show-me stock for the bears in terms of price action: They just need to wait for a small movement lower to trigger an entry. I see this as a small mover, where a simple short of the stock can be used, if triggered.
Editor's Note: This article was originally published at 9:30 a.m. EDT on Real Money on Aug, 5.