Real Estate Sector The Real Deal:
Below is the table of the YTD gains for the 11 major S&P sectors. One can see all of them are still in the green for 2019 so far (last column). The XLRE happens to be the second best performing group with an impressive 22.7% advance. Keep in mind these names tend to be less volatile, and the ETF has a nice dividend yield of 3.26%, trailing only the XLE which sports a yield of 3.64%. The fund sits just 3% off most recent all time highs, and put on a nice move earlier this year rising 13 of 14 weeks ending between 1/11-4/12. Like most ETFs there is heavy concentration at the top with the four largest holdings, AMT CCI PLD and SPG, making up 33%. This space deserves more credit that it gets.
Follow The Leaders:
Individual names that dominate their particular space do so for a reason. While it may not be immediately known, the PRICE action speaks volumes. Below is a general in the real estate services arena, Zillow. This name is still deep in correction territory, but compared to names like RLGY which is now down 80% from most recent 52 week highs, not a typo, one can see something good is going on within. Z does report earnings after the bell Wednesday, so one should wait for the release before putting capital to work, but give it credit for back to back positive reactions higher by 5 and 26.4% on 5/10 and 2/22 (after big losses of 26.9 and 14.8% on 2/22 and 11/7/18). On its daily chart it has scored just two CLOSES above the very round 50 number in the last one year. The chart has taken its time constructing the right side of a long base, after a big drop of 57.7% during a 12 of 18 week losing streak weeks ending between 7/20-11/16/18. This name is “building” relationships with not only prospective home buyers, but shareholders alike, pun intended.
Lose The Laggards:
The old adage, buy strength and sell weakness, still rings true. We profiled Zillow in the prior paragraph, and one of its peers that has been left behind, RMAX is the chart we examine here. Again PRICE action is all you need to know here, as the stock swims 47% off most recent 52 week highs. Perhaps it is a management thing, however this stock has been unable to show anything bullish in during the last 2 years. It has declined 12 of the last 14 weeks, and perhaps could be overdue for a bounce with last weeks bullish hammer candle. It may be a double bottom with the week ending 12/28/18 that rose more than 6% while registering a bullish engulfing candle. I would not recommend a purchase here, but if one feels it necessary do not look for a big turnaround here. Remember trends are much more likelier to stay in place than they are to reverse.