Digital Realty Trust, Inc. (NYSE: DLR)

Digital Realty Trust, Inc., a real estate investment trust (REIT), through its controlling interest in Digital Realty Trust, L.P., engages in the ownership, acquisition, development, redevelopment, and management of technology-related real estate. It focuses on strategically located properties containing applications and operations critical to the day-to-day operations of technology industry tenants and corporate enterprise datacenter users, including the information technology departments of Fortune 1000 companies, and financial services companies. The company’s property portfolio consists of Internet gateway properties, corporate datacenter properties, technology manufacturing properties, and regional or national offices of technology companies.
To review Digital’s stock, please take a look at the 1-year chart of DLR (Digital Realty Trust, Inc.) below with my added notations:

DLR has formed a very clear down-channel chart pattern over the last (10) months. A channel is simply formed through the combination of a trend line support that runs parallel to a trend line resistance. When it comes to channels, remember that any (3) points can start the channel, but a 4th point or more confirms it. You can see that DLR has several points of channel resistance (red) and support (blue). If you look back in October you can see that the stock has already failed to breakout once before.

The Tale of the Tape: DLR has formed a common pattern known as a channel, in this case a down channel, and has broken through its resistance. A long trade can be entered on a pullback to the previous channel resistance, which currently sits near $50. A short trade should be considered if the stock falls back inside its channel like what occurred in October.
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