Highwood Properties, Inc (HIW) shares rallied in after-hours trading following the announcement of the $650 million sale of the Country Club Plaza assets in Kansas City. The buyer is Country Club Plaza KC Partners LLC, a joint venture between Taubman Centers, Inc. (NYSE:TCO) and The Macerich Company (NYSE:MAC). The sale reduces the leverage ratio to the low end of HIW’s comfort zone.
Price action on the HIW 60-minute chart shows that the recent sideways trend has firmly respected bearish ABCD pattern that formed on December 29th. Price respected the $42.50 support level and has now completed the bearish reversal pattern. If we see further upside over the next couple of session take price above the $45.50 are, we could see a major leg higher target the $47.42 level.
It is around that area that price may form a new bearish ABCD pattern. Point D is targeted just with both the 161.8% Fibonacci expansion level of the $45.10 to $41.22 move.
If the bullish move stalls and the sideways trend remains intact, major support will come from the 200-day SMA, which currently trades at $42.13.
The Trade: Buy HIW at $44.30, with a stop loss at $43.90 and a take profit at $45.10. The Risk/Reward Ratio is 1:2