Is it Time to Get Back Into Real Estate Equities?
Potential Rebound
It looks like we are seeing a breakout on the very short timeframes. The price of VNQ has climbed above the resistance of a price channel that has held down the price action for several weeks.
Are we about to see a rebound? Or will we see more consolidation before a rebound? If the price falls back down into the price channel and makes new lows, then the rebound prospects will look a lot slimmer at that point.
Fibonacci Support
The potential rebound could correspond almost perfectly with the strong support of the 61% Fibonacci level of the current rally that began last year.
Bullish Subindicators
RSI and MACD are clearly in bullish territory on the weekly candles. This is always a good sign.
Potential Trade Opportunity
We might have a rebound taking place. But it is still too early to call. We need to see a little more upside before we can be fully confident in a rebound. If you would want to take a chance and get in early on this potential rebound, then I would definitely enter a stop loss near the previous lows to mitigate risk.
For confirmation of a rebound, I would need to see the price climb above the closest resistance levels to the current price. Once I see that, then I would assume that the price is heading up to the previous highs and the next resistance level on the way up. This would be around the 89.40 - 89.50 price range.
I have illustrated an example of how this might look in the chart directly below.
Conclusion
The charts for the real estate sector look like there might be a good trade in the mix. Personally, I wouldn't mind entering into a swing trade here. I would definitely use a stop loss just in case the price action decides to consolidate a little more or make a bottoming pattern before any official rebound.
The real estate market is in an awkward position. Commercial real estate has shown signs of trouble lately. While mortgage data and homebuilder data have been showing strong signs of improvement. Fundamentally, things look a little sketchy for the real estate sector. But the future might look brighter.
Perhaps the expected rate cuts by the Fed will have a positive impact on the industry. Maybe the lower borrowing costs could spur increased demand for real estate in general.
Good Luck Trading
As always, I am not a financial professional, and this is not investment advice. Be careful and be patient. Dont anticipate the market. Rather, participate in the market. Don't invest money that you can't afford to lose. Give some of your investments time and know when to cut your losses.
Don't be greedy. Don't invest in anything you don't understand. Don't put all of your eggs in one basket. Don't listen to the hype. Don't fomo or panic into or out of trades. Do your own due diligence. And just follow the trends. A trend is your friend. Good luck trading.
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Mcsnacks H Tupack : Potential buyers are still priced out of the market. Also anyone who locked in ultra-low mortgage rates in 2020 and 2021 are unlikely to move anytime soon. Id say give it at least until 2025 or a few months before that.
SpyderCallOP Mcsnacks H Tupack: Borrowing costs really need a big drop. Or the oversupply in housing needs to get even bigger.
Mcsnacks H Tupack SpyderCallOP: What I would look into is where JPM and Blackrock are about to move funds since they got out of the climate change investments. This new direction is where their Triple witching portfolio is going in March.
SpyderCallOP Mcsnacks H Tupack: So you don't like solar or real estate stocks, I take it?
Where do you think those big banks are going to move their money tomorrow?
Mcsnacks H Tupack SpyderCallOP: I think they are watching ER's to where to move it. Something like $WW International (WW.US)$ if it announces an ER that's in the positive then part will go into it and drive it back up into the 50.00 or higher range over 6-9months and then they would move into real estate.
Mcsnacks H Tupack SpyderCallOP: I see solar and real estate moving sideways until next year. Solar needs cheaper production costs or a longer lifespan on its panels.
Mcsnacks H Tupack SpyderCallOP: The big banks are going to invest their money into these stocks: $Viasat (VSAT.US)$ $Iridium Communications (IRDM.US)$ $EchoStar (SATS.US)$ and $Gilat Satellite Networks (GILT.US)$