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Inside the 12631 Trading Service, we have been looking at the development of the confirmed inverse head and shoulders bottoming formation printed several months back on the IYR, ETF for the real estate sector. With homebuilders perking up late this week, keep an eye on the IYR next week. The measured move target from the massive inverse head and shoulders is roughly $68, which has not yet been acquired.
A much more aggressive play would be DRN, the triple-levered ETF for the IYR. Of course, this carries much greater downside risk. Either way, if the idea is to press the bears when they have been caught out of position after Tuesday, then I believe IYR is definitely one of the places to look next week.
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