Short and medium term traders should be keeping an eye on HHC for opportunities to open a long position. Look for a breakout, but be wary of next quarters earnings and the $120 price level.
Howard Hughes Corp. (HHC) is a real estate development and management company focused on master planned communities. The housing market has been on fire due to low rates and the pandemic quarantines creating a desire for larger living areas. HHC earnings have beat estimates in three of the last four quarters. The stock has recovered most of its loss from the 2020 crash and is likely to continue that pursuit due to the homebuilders resillience to inflation. Rising prices of homes have insulated homebuilders from the inflation of building materials and labor costs. Helping them preserve their profit margin. It is important to note, the most recent quarter is the one that fell short of estimates. A single quarter miss is fine, but two misses in a row could indicate signifigant issues.
In terms of price action, HHC has been trending above its 50-day and 200-day SMA since November of 2020. It is currently setting up another base around the 50-day SMA. This offers a great position to enter long on a breakout. I generally do not pick price targets, but $120 has been an important area for this stock in the past.
Some things to look out for are next quarters earnings, the $120 price level, and and increase in rates. I would give special attention to next quarters earnings and the $120 price level when considering reducing my position. As well, high inflation comes with the risk of having rates increased. This is never great for the market, but companies with real assets (homebuilders) should hold up better than more speculative investments.