Alexandria Real Estate Equities Offers Yield and a Modest Upside Target

For his final "Executive Decision" segment of Mad Money Monday night, Jim Cramer checked in Joel Marcus, chairman of Alexandria Real Estate Equities (ARE) , the specialty REIT with a 2.8% yield.

Marcus explained that Alexandria specializes in campuses for life science companies. He explained that employees that can work from home are working from home, but most lab environments are already sterile, with employee distancing and protective equipment built-in. Fresh air and advanced air filtering are standard.

Marcus added that the company collected 98.4% of its rent for the month of April and it remains committed to raising its payout this year.

Let's check out the charts of ARE.

In this daily bar chart of ARE, below, we can see that prices made a sharp and rapid decline from the middle of February to late March. Prices rebounded quickly but have been stalled through much of April and early May. Prices are just above the bottoming 50-day moving average line and below the slightly improving 200-day moving average line.

The daily On-Balance-Volume (OBV) declined from early December till late March telling us that sellers were more aggressive before the pandemic worries. The OBV line has improved since late March but has further to go to break above the December peak.

The Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in April but has crossed to the downside for a take profits sell signal. Not the strongest picture.

In this weekly bar chart of ARE, below, we can see how deep the decline was for ARE. Prices retested the lows of late 2018 in just a few weeks. ARE has rebounded but has so far struggled around the underside of the 40-week moving average line.

The weekly OBV line is encouraging as it only shows a modest decline the past three months. The MACD oscillator is below the zero line and still has not crossed to a cover shorts buy signal.

In this daily Point and Figure chart of ARE, below, we can see a potential upside price target in the $176 area but a trade at $158.62 is needed for a breakout.

Bottom line strategy: The charts and indicators of ARE are heading in the right direction but not with convincing volume. Traders could go long ARE on strength above $159 for potential gains to the $175 area.

Employees of TheStreet are prohibited from trading individual securities.