Short Opportunity setting up in REIT's?

Posted by downtowntrader | 1/31/2010 11:08:00 PM View Comments

Stock Chart Analysis SPG
Simon Property Group, Inc (Public, NYSE:SPG)

I've been bullish the REIT space for a while, and they have managed to hold up fairly well even as the markets have started to really fall apart. Just two weeks ago, it looked like many REIT's were ready to bounce after finding support at their 20 day moving averages, but they weren't able to fight the markets weakness, and stalled out.

I'm going to highlight the recent action by showing a chart of Simon Property Group, Inc (NYSE:SPG), but the same action is prevalent in many REIT stocks. SPG cleared a large base in August that may of put in a long term bottom for the stock. If you step back and look at this stock on a weekly chart you can see the reverse head and shoulders base quite clearly. The breakout held after a couple of retest's and SPG continued to rally through the end of 2009. SPG was consolidating while holding above the breakout area in January which looked constructive for the bulls. SPG looked like it would bounce off its 50-day moving average on 1/20, but failed the next day and fell back into the prior base. SPG has been fighting the downward momentum in the markets the past week, but ultimately, the recent action is looking like a bear flag.

One of the things I like about this chart and the other REIT's is that they aren't oversold like most of the markets. One of the reasons I have been trying to stand pat recently is that there are very few long setups left, but the majority of stocks are down too much for me to enter a low risk short. Despite looking at these as long setups for the past few months, it looks like the REIT's may be my first options to short in the coming week or two.

Good Trading,


other REIT's to watch
ProLogis (Public, NYSE:PLD)
Federal Realty Inv. Trust (Public, NYSE:FRT)
Vornado Realty Trust (Public, NYSE:VNO)
SL Green Realty Corp. (Public, NYSE:SLG)
Kimco Realty Corporation (Public, NYSE:KIM)

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