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Hotel stocks are starting to outperform relative to the S&P500, as the industry group and consumer discretionary sector shows signs of institutional buying.

This year, the United States travel sector is anticipating a 35.6% bump, compared to 2020. And next year, the U.S. travel sector is expected to grow by another 28.4%, according to the report, which was produced with Oxford Economics.

“Our research shows that while the global travel [and] tourism sector is slowly beginning to recover; the U.S. is recovering faster than many other regions,” Julia Simpson, WTTC president and CEO, said in a statement shared with T+L, adding because of the “predicted rise in international and domestic spend this year and next, both jobs and GDP are on the rise.” – Travel + Leisure

Dow Jones US Hotel Index

Hotel stocks are starting to outperform relative to the S&P500, as the industry group and consumer discretionary sector shows signs of institutional buying.

Dow-Jones-US-Lodging-Hotels-Index-Daily-Chart

The Dow Jones US Hotels Index, in the top panel, is outperforming versus the S&P500 as a whole.

Stochastic is swinging higher from the “buy zone.”

We are looking for volume to pick up over the next few days and weeks as the US economy experiences a recovery of this important industry group.

A follow through day, with the hotels pushing higher, would be a welcome confirmation. If airlines continue higher, that would be a plus.

Hilton Worldwide (HLT), Hyatt Hotels (H), Marriott International (MAR), and other large hotel chains, showed signs of institutional activity as the stocks bounced at the 50d moving average. Volume picked up during the day.

Hilton Hotels

Hilton Worldwide (HLT) will most likely clear the 146.00 (+/-) zone this week. A push above this level would lead the stock into an area of low supply. We’d would look for follow-through over the next few weeks.

Note the relative strength versus the Hotels index in the lower panel. Hilton is starting to lead.

Click to enlarge the chart.

Hilton-HLT-Relative-Strength

Hilton Worldwide (HLT) is ranked number two in the hotels category, just behind number one ranked Wyndham Hotels and Resorts (WH). 

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Happy Trading,

Vinny

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