Marriott International might look tempting, but it seems to be exhausted, too.
Marriott International Inc. operates and franchises hotels and lodging facilities in over 110 countries worldwide. With over 5700 properties and more than a million rooms, it is the largest hotel company in the world today. As of today, its market capitalization stands slightly under $35 billion at $89.44 a share. Things were looking a lot differently in November, 2008, when the stock barely managed to stay above the $11 mark.
So, after eight full years of impressive advance, many might start wondering if it is time to invest in this industry leader. Well, we believe that buying because the price has been rising is not the best approach. Instead, let’s analyze the post-crisis uptrend and see what its wave structure can tell us about Marriott stock’s prospects.
Marriott’s weekly chart allows us to quickly realize that the stock is now trading within the fifth wave of the rally, which began in late 2008. According to the Elliott Wave Principle, this is the last phase of the uptrend, because once wave (5) is over, a three-wave retracement should start. In a more distant perspective, the anticipated corrective decline is likely to drag Marriott’s stock price back down to the support level of wave (4). In other words, instead of joining the bulls now, investors, who would like to own a share in this business, should consider saving their money for the moment, when Marriott falls between $60 and $50 again.
If this is the correct count, chances are the bulls are going to reach $100 a share, because wave (5) does not seem complete yet. That is why shorting is not even an option. However, buying seems risky, too. You do not want to go long just before a major bearish reversal, do you?