Commercial Real Estate, Here Is The Trade
The commercial real estate sector has been on fire since October 4, 2011. At that time, the iShares Dow Jones Real Estate ETF (NYSE:IYT) traded as low as $46.70 a share. Last week, the important IYR closed at $60.78 which is a new six month high. This rally has been nothing short of sensational for the entire sector. The IYR is now overbought and extended in the short term on the daily chart. Traders must begin to look for a pullback or at least some consolidation in the near term. The near term resistance levels for the IYR are around the $62.00, $70.00, and $74.50 areas. Should the IYR decline from its current price traders should watch for near term support around the $57.30, $56.10, and $55.00 levels.
Simon Property Group Inc (NYSE:SPG) is considered the best of the best when it comes to the commercial real estate stocks. This stocks has surged higher by more than $30.00 since October 4, 2011 when SPG was trading around the $103.50 area. Last week, SPG closed at a new all time high at $136.69 a share. The stock remains in a very strong uptrend by trading above all of the major moving averages. The only problem with SPG stock at this time is that it is a bit overbought. Traders should watch for near term daily chart resistance around the $138.00, and $143.00 levels. Should this market leading stock pullback or decline from its current price traders should watch for support around the $129.00, and $123.00 levels. SPG will report earnings on February 3, 2012.
Vornado Realty Trust (NYSE:VNO) is another leading commercial real estate company based out on New York City. Traders must understand that while this stock has been rallying higher over the past month it is still trading below its November 2011 high. This tells us that the stock is weak relative to the rest of the commercial real estate sector. Traders should watch for near term resistance around the $83.00, $85.00, and $89.50 levels. Should VNO pullback from its current price there should be short term daily chart support around the $77.60, 76.20, 74.70, and $73.00 levels.