Healthpeak Properties, Inc. (PEAK), a health care real estate investment trust (REIT), is set to plunge even further after its latest price drop. Just in the past few days, shares have already plunged 10%. This comes as the broader stock market is being hit with a selloff at the same time.
But Healthpeak Properties is one stock you don't want to buy on the dip. After looking at its price chart, shares are set to fall another 25% from here. Healthpeak Properties stock is breaking out to the downside of a recent wedge pattern, signaling that the shares have much further to fall. Take a look:
In this price chart, you can see the clear support trendline in green and resistance line in red creating the wedge pattern. At the end of last week, Healthpeak Properties shares broke out to the downside of this pattern, potentially setting up the stock to fall all the way back to $19 per share. That would be more than a 25% drop from current prices – but this is being conservative.
Wedge patterns tend to see breakouts that extend for roughly the height of the pattern – in this case $12 per share. With the breakout occurring at $28, that means we have a downside target just $16 per share – $12 below the breakout point. That's a 38% decline from today's price. However, being conservative, we can expect the stock to find some support around its recent low of $19 per share – about 25% lower.
The Bottom Line
Healthpeak Properties is breaking out on the wrong side of its support level. This is setting up shares on a potential freefall just as the broader market is hit with volatility. A conservative price target has the stock falling over 25% from its current price to $19 per share. This is one stock you want to avoid.