DDR Corp (NYSE:DDR), a real estate investment trust (REIT), ended the day in the red for the second consecutive day. More than the loss of 1.2% in price, more alarming was the volume of 12 million, which was not only much higher than the average volume of 3.5 million but the highest in the last few years. Regardless any fundamental reason, this is not a soothing issue for any bull.
Interestingly, DDR Corp (NYSE:DDR) just saw an upgrade in the target price by Citigroup Inc. to $20 from the earlier $19 though the “neutral” rating remains unchanged. The last result reported by the company last month was disappointing for the street as it had reported earnings per share (EPS) of $0.31, just what the expectation was and revenue of $248.56 million, just short of the expected $250.83 million. The 6.8% improvement in the quarterly revenue on a y-o-y basis didn’t look very encouraging but still the resultant loss in the stock price was mostly retraced by a rally this month.
Technically, the picture is neutral with the bears threatening just a little bit now. In the short term, the danger signal comes from the exact 61.8% retracement by the last rise from the March low of $18.25. The rejection from that retracement level looks forceful till now, with the volume adding to the weakness.
The chart attached clearly shows that a break below $18 would negate the uptrend prevalent for the last 1 year and drag it down to the long term support, coming from the lower boundary of the 5 year long channel, at $17.50. If the bears manage to push the price down, then the price action in the band of $17.50-$18.00 will determine the course of the stock for the next 12-15 months.