Three REITs Worth Watching

A favorite chart pattern of technical and fundamental analysts is the "cup and handle." The main reason for this may be that the pattern requires a higher low, which suggests price strength and positive momentum. Real estate investment trusts have been attempting to base over the last several months, and three stocks in the space have formed cup-and-handle patterns that look ready to breakout.

Equity One (EQY) is a REIT that invests in shopping centers and retail properties. The daily chart shows the stock price making a low in December last year near $21.50, then making a higher low this month, tracing out a cup and handle with rim line resistance in the $22.75 area. This resistance is being reinforced by both the 50- and 200-day moving avenges. The Relative Strength Index and the Moving Average Convergence/Divergence are above their centerlines. While volume has dropped during the formation of the handle, Chaikin Money Flow remains positive. The stock is a buy after a close in upper candle range above the rim line, with an initial stop under the right shoulder. A pick-up in volume will be required to power a move to the $24 target price projected by the pattern....262 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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