Our site thrives on coincidence and luck. Which brings us to our posting on Medical Properties Trust (MPW) dated June 2, 2015. At the time, when the REIT was trading at $13.75, we said the following:
“In the period from July 21, 2011, MPW declined slightly below the mid level before rebounding. We expect that, at the very least, MPW should retest the current mid level at $8.45.”
Basing our work on the studies of Edson Gould’s Speed Resistance Lines, we can see that the –28% decline of MPW was a little more than slight. In fact, the drop was halfway between the mid level of $8.45 and the extreme downside of $5.14.
Since the low of $9.86, MPW has rebounded in a similar fashion as it had during the 2011 to 2013 period. There may be more upside for MPW, however, our goal is anticipation of the downside risk. In this instance, we got lucky, again.