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IYR At A Possible Bounce Level

ByFrank Zorrilla
Published 11/14/2012, 12:56 AM
Updated 07/09/2023, 06:31 AM

The iShares Dow Jones US Real Estate ETF (IYR) tracks the Dow Jones U.S. Real Estate Index. It is comprise of 64 real estate related stocks: Simon Property Group (SPG), Public Storage (PSA), Essex Property Trust (ESS), just to name a few.

What led me to look at 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.

Because ETFs 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 today, the probability increases. But what I also noticed is that on the weekly chart, IYR is back to a level that used to be resistance but can very well act as support the first time around, especially after 5 consecutive down closes. That resistance level also coincides with its rising 50 week moving average (the $62.50-$62.70 level).

IYR
There are different ways to play this set up, make sure to consult your financial advisor/ guru/ broker.

Disclosure: 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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