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Click here to view this email in your browser. Hey Traders
Today, we have another round of trading news and information from our top analysts here at Traders Agency. And of course, our Trade of the Day. Stocks Gain: Nearly all sectors inside the benchmark S&P 500 Index are trading higher today with only the defensive consumer staples and healthcare lagging but not by much. This comes as we got the massive Consumer Price Index (CPI) rate at 7% on an annual basis. The lack of concern follows from the confirmation testimony from Federal Reserve Chairman Jay Powell, who seems to have charmed the markets into thinking that inflation will get resolved without pain. Bonds Gain: Even with another month’s massive inflation data, US Treasury bonds largely gained rather than falling with the benchmark 10-year yield slipping to 1.72%. Since bonds have fallen in price, risen in yield ahead of the inflation data, the argument continues that it's all baked in and that it will get solved. Commodities Gain: From energy that was all up today through to metals that were up with some major gains in key metals such as Nickel as well as for many agricultural products, commodities continue to show that inflation is definitely in the pipeline for companies and consumers regardless of Fed promises. The Color of the Day is Beige: The Fed’s Beige Book was released today with regional banks reporting a modest decline in growth,but this was largely seen in the travel and leisure sectors. Supply chain challenges are reported as easing a bit which is good news, but labor supplies remain a problem. And overall, prices are gaining for company input goods and services. To keep me up on what you’re thinking or what you want to see us cover – you can always email me directly at neilgeorge@tradersagency.com.
Now, on to our Trade of the Day… Digital Realty Trust Inc.
Every modern technology service involves data. And it means processing it, uploading and downloading it as well as processing it all in real time… right now. And all of this will keep getting bigger in reach and scope.
More importantly, data doesn’t work if it is locked up inside a single company and its servers. It needs to be accessible for both company insiders as well as customers, and it needs to be secure.
You know all of this as it is really about cloud computing. Many major technology companies are either dependent upon cloud services or provide their own cloud services, including the big companies such as Amazon (AMZN), Microsoft (MSFT) and Alphabet (GOOGL).
In addition, with the rollout of fifth generation wireless (5G), cloud services are increasingly becoming the backbone of the network as localized antennas link to cloud services to transmit data and even voice for services.
To make cloud services work, the market needs data centers. These are massive centers with servers and communications as well as heavy duty storage for data.
I have already presented a company with vital data centers in the internet hub market in Northern Virginia and beyond in Corporate Office Properties Trust (OFC) as a Trade of the Day, as it is a primary data center company with mega tenants, including Amazon.
But today, I’m presenting a larger and primary data center owner and operator that is at the core of many to most cloud services in the US and well-beyond with Digital Realty Trust Inc. (DLR).
Digital Realty is a real estate investment trust (REIT) with a massive network of data center properties throughout the US and in key markets around the globe. And its client/tenant list is a who’s who of technology and communications companies.
It is not hyperbole to say that little data doesn't run without the services of this company’s networks.
Now, since this is a REIT, it will often trade as a real estate company and not a vital essential services company for data, cloud services and technology. And over the opening days of this trading year, the stock has been slipping.
But this is providing an opportunity to buy into this vital company. Revenue is up over 21% over the trailing year, and that’s accelerating from the five year compound annual growth rate (CAGR) of over 17%.
And the company has a healthy return on its assets as it is running a current return of 11.10% on a funds from operation basis (FFO), which specifically measures the actual ongoing profits from its assets independent of one-off additional items.
In addition, it pays a tax-advantaged yield just shy of 3%, and the stock is a bargain for technology at only 2.7 times its intrinsic (book) value.
Digital Realty Trust Inc. Price -- Source: Dow Jones With the current price at $159.25, DLR is a buy under $161.75 with a near-term target of $178.25 and even more beyond that. And for safety, consider a stop at $155.50.
Now, on to the best of Traders Agency… The Best Way to Build a Better Trading Strategy
I know it can get a bit confusing when dealing with all the data for trading, so I wanted to pause for one moment and give you some solid info that can help you become a better trader.
Properly setting up my charts is a critical part of becoming a successful trader. Without our timeline charts, we have no way of knowing how or when to jump into a particular market!
And while it may seem intimidating, I'm here to show you how easy it easy for any trader to use timeframe charts regardless of experience level. Let's take a look at how I set up my timeline charts so you can leverage my information to boost your own success. Get Josh's Daily Direction
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Can Less Risk Lead to More Reward?
Investors hoping for a bit of trading stability on Wall Street in the days to come should expect to be disappointed yet again today as the market continues to chop around with no real direction.
As recently as this past Monday, the Nasdaq reached official “correction” territory by falling 10% from its high.
For reference, many investors consider a 10% decline from a high a correction and a 20% decline a “bear market.”
Unfortunately, there is no way of knowing when a market will turn around or how much further it has to fall and that's where the difficulty lies.
That’s why I wanted to keep the plan I'm bringing you today as simple as possible... Get Stock Surge Daily
Recommended Link: Here at Traders Agency we want to wish you an AMAZING 2022! So, we are offering you Ross Givens’ Stealth Trades Gold for an unbelievably low price. Normally, you can pay $197 for a year and receive all the amazing benefits of Stealth Trades… BUT right now we want to make it so easy for you to join that all you need is FIVE BUCKS! Yes, just $5 for the first month… and the rest of the year FREE! We know it sounds too good to be true… But we don't want you to miss out! Click here to see why you need to jump on this and join Stealth Trades TODAY!
Don’t Underestimate the Power of Trendlines
There are a lot of moving parts in a good trading strategy. However, if a trader's ultimate goal is to win consistently, one important factor must be addressed. It's not as tough as you would think to construct accurate trendlines.
If you've been following my trading technique, you know that trendlines are an important part of my winning system. However, how do you know where to draw trendlines on a timeline chart? Believe me when I tell you it's not as difficult as it appears.
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Looking for Momentum in All the Right Places As we move further and deeper into the new year, we're always looking for the type of momentum stocks that are moving up and to the right in a very smooth pattern because of heavy institutional buying.
However, momentum is the other long-term anomaly -- along with buying undervalued securities -- that no one has ever quite been able to arbitrage away.
Undervalued stocks perform better over one, two and three year periods, but in that six to 12 month period, momentum rules the day most of the time.
Best of all, if you have half your portfolio in momentum and half your portfolio in value, one tends to zig when the other zags, smoothing out overall volatility, creating a much smoother ride to accumulating the wealth you need to live the life you want. Get A Better Way To Wealth Thank you for reading Beyond The Trade! Look for much, much more every day the markets are open.
You’ll get further updates on all that is going on to make your job as a trader all the more profitable and better informed.
I’ll also continue to provide updates on the stock ideas I bring to you in Beyond The Trade.
To provide feedback, suggestions and questions, feel free to email me directly at neilgeorge@tradersagency.com.
All My Best, Neil George, Executive Editor at Traders Agency
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