Remember Those Beaten Up, High Yield Mortgage REITs?

The May move lower in the mortgage REIT market, especially for high yielders was a doozy. Some lost over one third of their value. I wrote back then at some point it would be time to buy them back. That although they may not continue to pay 20% dividends that they would likely still pay well above market rates. They just needed to stabilize. Well some of those beaten down beauties are looking pretty stable and perhaps even ready to rise in price. Take a look.

American Capital Agency, AGNC
American Capital Agency (AGNC) made a double bottom at 20.30 and has been broadly basing over the last 2 months. Now nearing resistance at 23.30, it has a Relative Strength Index (RSI) that is rising and about to cross into bullish territory and a rising Moving Average Convergence Divergence indicator (MACD) that is crossing back higher after a brief pause. Over 23.30 this looks to have major resistance next at 26. This one currently yields 18.40%.

Cys Investments, CYS
Cys Investments (CYS), closed over the 20 day Simple Moving Average (SMA) today, the first time since the May plunge began. It has a RSI that is making new highs and a MACD that is moving back higher after a positive cross. Using the 7.50 area as a stop it sees resistance at 8.20 and 8.90 next. This name has a 17.90% yield currently.

Digital Realty Trust, DLR

If the Mortgage REITs are still too hot for you, then maybe Digital Realty Trust, $DLR. This one manages technology properties and still pays a 5.7% dividend yield. The chart looks pretty good as well. Moving back over teh 20 day SMA and a bull flag it has a Measured Move to 58.50. The RSI and MACD aare supportive of more upside in this name as well with resistance next at 56.25 and then the 58.50 area.

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.

Original post