"Patience
is not only a virtue, it is a necessity."
-- Christina Nikolov
Suite Deal
by
Christina Nikolov, Founder ChartWatchCentral
Stock/Ticker: La Quinta Properties (LQI)
Date: February 10, 2003
Opinion: Bullish
Current Price: $4.10
Target Price: $4.70, then possibly $5.35
Commentary:
Shares of La Quinta Properties (LQI) plunged 23% over the past three months and 49% since peaking in April 2002. (chart #1) We're optimistic this downtrend will soon be broken.LQI reached an intra-day low of $3.95 on October 21, 2002, then surged 35% to $5.35 over the next twelve sessions. Three months later, the shares are once again revisiting that October low and now appear to be tracing out a double bottom. Strong support can be found at the base of this formation at $3.95. (chart #2)
While we anticipate a rebound from this level, potential overhead resistance at $4.70 and $5.35 could make those levels difficult to surmount. The shares might also encounter selling pressure at the nine month downtrend, which currently resides near $4.25. Also worth watching are the 50 and 200-day moving averages, which are currently perched at $4.55 and $5.48 respectively. (chart #1)
La Quinta's executives have been trying to turn things around in recent months. Late last year the rewards program was revamped to allow members to earn points based on dollars spent and redeem them for free night certificates and many other unique rewards, including a choice of gift certificates for use at more than 150 retailers and restaurants, and of course, airline miles/credits. The company also stated that members can begin redeeming their points much sooner and reach top tier membership levels faster than under many other hotel loyalty programs.
The new program has been well received. According to the President and CEO of La Quinta, more than 20,000 new Rewards members are coming on board each month.
About a month ago, LQI took another step in the right direction when it partnered with Southwest Airlines (LUV). Members of both La Quinta Returns and Southwest Rapid Rewards can now choose between Rapid Rewards Credits or Returns Points.
Chart(s):
1) La Quinta Properties (LQI) Twelve Month Daily Chart
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Click the Chart for an Enlarged View
2) La Quinta Properties (LQI) Five Month Daily Chart
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Click the Chart for an Enlarged View
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