REITs at Risk?
Real estate investment trusts have struggled this year, and now some traders may look for a bearish move.
The first pattern on today’s chart of the Real Estate Select Sector SPDR Fund is the series of higher lows in May, June and August. XLRE has struggled to hold the line in the past week, which may suggest it’s a bearish flag in the longer-term downtrend starting in early 2022.
Second, notice the lower highs at two key points. In July, the REIT index failed to reclaim the June 2022 low around $38.63. It then slid below the July 18 low of $37.82 and has remained there since. Is this a double case of old support becoming new resistance?
Third, you have a large bearish engulfing candle on July 27.
Fourth, prices have consolidated below the 50- and 200-day simple moving averages (SMAs). That may suggest its longer-term downtrend is still in effect. (Interestingly, XLRE never had a “golden cross” this year.)
Finally, MACD has been on falling since late last month.
Standardized Performances for ETF mentioned above:
SPDR Real Estate Select Sector SPDR Fund® (XLRE):
1-year: -13.87%
5-years: +15.55%
10-years: N/A
(As of July 31, 2023)
Performance data shown reflects past performance and is no guarantee of future performance. The information provided is not meant to predict or project the performance of a specific investment or investment strategy and current performance may be lower or higher than the performance data shown. Accordingly, this information should not be relied upon when making an investment decision.
Exchange Traded Funds (“ETFs”) are subject to management fees and other expenses. Before making investment decisions, investors should carefully read information found in the prospectus or summary prospectus, if available, including investment objectives, risks, charges, and expenses. Click here to find the prospectus.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
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TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
The first pattern on today’s chart of the Real Estate Select Sector SPDR Fund is the series of higher lows in May, June and August. XLRE has struggled to hold the line in the past week, which may suggest it’s a bearish flag in the longer-term downtrend starting in early 2022.
Second, notice the lower highs at two key points. In July, the REIT index failed to reclaim the June 2022 low around $38.63. It then slid below the July 18 low of $37.82 and has remained there since. Is this a double case of old support becoming new resistance?
Third, you have a large bearish engulfing candle on July 27.
Fourth, prices have consolidated below the 50- and 200-day simple moving averages (SMAs). That may suggest its longer-term downtrend is still in effect. (Interestingly, XLRE never had a “golden cross” this year.)
Finally, MACD has been on falling since late last month.
Standardized Performances for ETF mentioned above:
SPDR Real Estate Select Sector SPDR Fund® (XLRE):
1-year: -13.87%
5-years: +15.55%
10-years: N/A
(As of July 31, 2023)
Performance data shown reflects past performance and is no guarantee of future performance. The information provided is not meant to predict or project the performance of a specific investment or investment strategy and current performance may be lower or higher than the performance data shown. Accordingly, this information should not be relied upon when making an investment decision.
Exchange Traded Funds (“ETFs”) are subject to management fees and other expenses. Before making investment decisions, investors should carefully read information found in the prospectus or summary prospectus, if available, including investment objectives, risks, charges, and expenses. Click here to find the prospectus.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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