Real Estate Trend Test

Real estate (IYR) broke its nine-month trend; now testing the underside.

The break was on exceptionally heavy volume from January 4th through the 7th, and naturally lends itself to be tested. That’s where we are now.

Adding to the reversal premise, narrow thrust action preceding it.

When thrust distance narrows, it’s time to expect a trend change.

Up-side appears limited as IYR is contacting its trend while at the same time, approaching significant resistance in the 85 – 86 area.

Unless IYR penetrates that resistance, it’s still subdividing lower, indicating reversal in progress.

We’re still positioned short (via DRV, not advice, not a recommendation) with a bit more draw-down than desired.

The first hour of trading is likely to give a signal to stay in or step aside and wait.

Separately, in other markets, looks like GDX is going to test or start to test, underside (bear flag) resistance today.

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

%d bloggers like this: