Avalonbay Communities Inc

AAA

For today's chart we've chosen to take a look at Avalonbay Communities Inc (NYSE:AVB) because it is testing the resistance of its 200-day moving average. Generally speaking, the 200 DMA is looked upon as a strong level of support/resistance and is used by many traders to determine the long-term trend of an asset. As you can see from the chart below, the price bounced off the moving average in mid March and many are curious to see if this will happen again.

The other reason we've chosen to take a look at this chart is because the last two candlesticks, known as dojis, are confirming that the bears may be getting ready to stage a reversal. The formation, which is constructed of a very tight trading range, is a clear indication of the battle between market participants. Given the overhead resistance, it looks like the bears may be getting ready to send the stock lower. We'll keep a short-term bearish outlook on this stock until the price closes above the 200-day moving average.

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