Conclusion, Investment Implications, Strategy
Real Estate Sector constituent Xenia Hotels (XHR) is currently amid favorable conditions for both outright strength and relative outperformance versus the S&P 500. A sustained rise above the $18.29 area would target an additional 15% rise to $22.10. This is an Asbury Momentum trade idea.
Analysis and Rationale
Xenia Hotels & Resorts, Inc (XHR). is a self-advised and self-administered REIT that invests in uniquely positioned luxury and upper upscale hotels and resorts, with a focus on the top 25 U.S. lodging markets as well as key leisure destinations in the United States. The Company owns 37 hotels comprising 10,749 rooms across 16 states. Xenia’s hotels are in the luxury and upper-upscale segments, and operated and/or licensed by industry leaders such as Marriott, Hyatt, Kimpton, Fairmont, Loews, and Hilton, as well as leading independent management companies including The Kessler Collection and Sage Hospitality.
The upper panel of Chart 1 below plots XHR daily since October 2021 along with its 200-day moving average, a widely-watched major trend proxy. The lower panel plots the daily relative performance of XHR versus the SPDR S&P 500 ETF (SPY) along with its 63-day (quarterly) moving average, the latter which identifies the Strategic trend of relative performance.
Chart 1
The green highlights across both panels show that XHR is rebounding from a Mar 24th test of major support at the 200-day MA, currently at $17.89 (upper panel), while simultaneously testing its Strategic trend of relative outperformance versus the S&P 500 (SPY, lower panel). Combined, these metrics indicate a low risk/potentially high reward opportunity to buy HXS.
Risk/Reward
Table 1 below shows that, considering a $22.10 upside target and a protective stop placed below the $18.29 area, a long entry price of $19.25 would provide a 1:3.0 risk/reward ratio (risking $1.00 to make $3.00) with an initial risk of 5.0%.
Table 1
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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.