The high yielding, typically low beta REITs have gone through a metamorphosis of sorts in 2013. Once seen as a bastion of safety, the IYR (sector ETF) actually because a momentum leader in the first several months of this year.
That yield trade, however, became too much of a one-way phenomenon, as the rubber band eventually snapped in May, with an abrupt and ferocious move from multi-year highs down well below its 200-day moving average.
Recently, the bounce in Treasuries, with rates falling, has not helped the REITs in the way you would have thought. However, as I write this in the final hour of trading they are flipping green and attempting to stabilize.
For Thursday, I am looking at the potential for a long REIT trade, provided that Treasuries hold above the resistance trendline I have drawn and been discussing on the first chart, below (about $106.30).
DRN Is an aggressive, 3x long instrument levered to the REITs to consider, for a quick bounce.
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GEO and CXW have had strong bounces this month, almost panicked out of GEO last month but down volume always seemed too weak.
Yup. The prison REITs have shown some relative strength to other REITs of late.