A group which has flown under the radar but which has nevertheless been relatively strong compared to the S&P index are a number of issues in the hotel group. While there are a number of hotels which are owned by ETF trusts and therefore more financial products than pure plays, there are a few which are direct plays.
The diagram below illustrates the relative movement of a select group versus the larger market indices over the past 9 months:
We can observe that while the data shows that the net movements have been more or less sideways as of the past few months, the hotel group managed to outperform since last year. Among the hotel group that we’ve isolated, there are disparities of performance as you’d expect despite the similarity of trend.
We can see that after a similar period of a long consolidation within their respective uptrends, Hyatt has begun to break out to new highs. I expect Hilton, Marriot and InterContinental Group to follow suit over the summer months but for now Hyatt shows the better relative strength.
At the other end of the customer price spectrum we observe Red Lion Hotels and Choice Hotels:
While the weekly charts show that consolidation continues in these issues, their positons above the moving averages, the continued high SCTR readings and favorable momentum indicators gives clues that the next big resolution of these issues will be on the upside. Seasonally, we can show that there tends to be statistical upside movement of these issues into the summer and fall months. When looking for an imminent breakout of trading ranges, typically we would need to see a buildup of volume which is a tell. There is not yet conspicuous signs of this, but the accumulation patterns of these issues have been in play for a while and we expect further strength.