IYR At a Possible Bounce Level
- Posted by Frank Zorrilla
- on November 13th, 2012
The IYR tracks the Dow Jones U.S. Real Estate Index, the ETF is comprise of 64 real estate related stocks; Simon Property Group, Public Storage, Essex Property Group, just to name a few. What led me to look at the IYR is that it’s been down for 5 days in a row and from a numbers perspective the ETF is oversold at current levels. Currently only 11% of the stocks within the ETF are above their 10 day moving average, and only 14% are above their 50 day moving average. The fact that ETF’S are mean reverting vehicles this type of set up has a high probability of a 1-3 day dead cat bounce, if it opens lower tomorrow the probability increases. But what I also noticed is that on the weekly chart the IYR is back to a level that used to be resistance that can very well act as support the first time around especially after 5 consecutive down closes, to boot that resistance level also coincides with its rising 50 week moving average (the $62.50-$62.70 level).
There are different ways to play this set up, make sure to consult your financial advisor/ guru/ broker or you can contact us at ZorCapital
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
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Frank Zorrilla is the founder and chief investment officer of Zor Capital LLC.He began his Wall Street career 10 days after his 20th birthday when he became a Series 7 licensed stock broker. More »
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