Will commercial real estate follow residential real estate and head lower? Find out what the charts have to say.
Commercial REITs are ripe for a precipitous fall in the coming months, according to Oppenheimer chief market technician Carter Worth.
On the technical side, both the sector and a number of key stocks within the sector are flirting with breaking through support. Worth examines 1 year charts for Prologis (PLD) and Simon Properties (SPG) and says the trend lines lead him to believe that both will move lower in the days ahead.
It makes sense, if you examine the fundamental side of the story. If the consumer gets weaker the sector as a whole could be damaged. That, in turn, would trigger a number of store closings.
If you’re looking to trade the trend Worth recommends buying the Ultra Short Real Estate Proshorts, which is double inverse this sector.
I might have to take the other side of that trade, says Karen Finerman. I think REITs have already moved substantially lower.
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Trader disclosure: On July 7, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (ATVI), (WMT), (DIS), (MSFT); Najarian Owns (AAPL), (NOK), (TSO), (XLF), (XTO), (FNM), (ANR); Najarian Owns (FNM) Puts, (MER) Puts; Najarian Owns (RIMM) Calls, (SLB) Calls; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Finerman's Firm Owns (GE), (MPG), (MSFT), (SUN), (TSO), (VLO); Finerman's Firm And Finerman Own (PDE); Finerman's Firm Owns SPX Index Puts; Finerman's Firm And Finerman Own (C) And (C) Leaps; Finerman's Firm And Finerman Own (FLS); Finerman's Firm Is Short (SPG), (IYR), (IJR), (MDY), (SPY), (IWM); Finerman's Firm Is Short (XME) And Owns (XME) Puts
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