A technical review of the REIT Medical Properties Trust (MPW) applying Edson Gould’s Speed Resistance Lines is charted below:
The conservative downside target of $11.75 was achieved after the decline from the May 2013 peak. The next downside target is at the mid level of $8.45. The extreme downside target is $5.14.
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.
If MPW were to decline in a similar magnitude, as from the prior peak of February 2007 to the low of March 2009, MPW would fall to $3.24. However, the market environment was far out of balance in the real estate sector at the time and it is less likely that falling -80% is in the cards. However, The extreme downside target of $5.14 would not be considered out of the range of possibility.
Who is Edson Gould?
"Edson Gould spent over 60 years working in and studying financial markets. Gould studied the arts at Princeton, engineering at Lehigh (from where he graduated in 1922), and finance at New York University. In 1922, after working for a short time at Western Electric, he joined Moody's Investor Service as an analyst and later was editor of Moody's Stock Survey, Bond Survey, and Advisory Reports. In 1948, he began at Arthur Wiesenberger & Company, where he developed and edited the well-known Wiesenberger Investment Report and became a senior partner. He also was Research Director at E. B. Smith (which later became Smith Barney), and worked for Nuveen."
(source: Market Technicians Association. Gould, Edson Beers, Knowledge Base. Accessed April 26, 2012. link MTA reference.)
"Market technician Edson Gould always laughed at the idea of having a significant influence on the stock market, but his predictions were the most precise around. He pinpointed major bull markets and prophesied bottom-out markets as if he had his own peephole into the future. But in place of a crystal ball and wacky off-the-cuff schemes, his were smart, intensely researched and time-tested theories that made him a legend in the investment community."
(source: Fisher, Kenneth L.. 100 Minds That Made the Market. Business Classics, Woodside, CA. 1993. page 320.)
