CBRE Group Inc (CBG) — This real estate services firm is up more than 12% year to date and may hold up better than the broader market should the going get choppier in September and October. More importantly, it could end up rebounding strongly following any market weakness.
The timing of an interest rate increase by the Federal Reserve remains the central focus of U.S. markets. If it occurs at the September meeting, investors should soon realize that the world is not falling apart as a result of a 25-basis-point hike. And I expect housing-related stocks to continue to perform well on bullish housing data.
Looking at the multiyear price action, we see CBG stock has steadily advanced, oscillating in a well-defined range. Given the backdrop of still-improving housing data, the bigger picture calls for buying CBG stock near the lower end of the uptrending channel around $34.50.
On the daily chart below, however, we also see that shares have been stuck in a smaller range since early April. While more structural investors could look to buy CBG stock on a pullback to the $34 to $35 area per the above chart, traders could also buy shares on a breakout above $38.70 for a move toward $40.
Given the anticipation of more volatility ahead that should see a better mean-reversion move lower in the broader market, I would prefer to buy CBG stock near the lower end of its trading range, which should provide a better risk/reward profile with a price target in the high $30s.
