The recent selloff in a certain group of stocks could be setting up a nice trading opportunity for the second half of the year.
In the first half of 2015, interest rate-sensitive stocks such as utilities and REITs were pummeled on fears a rate hike by the Federal Reserve later this year would start to make bonds a more attractive option than the healthy dividend yields these equities offer.
Since reaching all-time highs in January, the Utilities Select Sector SPDR Fund (XLU) and the Vanguard REIT Index Fund (VNQ) are both down more than 16 percent, trading Tuesday around the lowest level this year.
But as these stocks stall, an increasing number of traders are taking a contrarian approach, scooping up the shares.
"We are making the case for increasing exposure to utilities and REITs," wrote Carter Worth, head of technical analysis at Cornerstone Macro, in a recent note to clients Monday.