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US Real Estate sector examples continued

June 16, 2014

Following on from last week, the next example I will show is that of Vornado Realty Trust (VNO). This is an industrial & office REIT and is the 10th largest holding of the iShares U.S. Real Estate (IYR).

Vornado Realty Trust (VNO) v IYR

VNO V IYR WEEKLY RTT

  • The 14 week RSI formed bearish divergence at the latest high at the end of May
  • There was also bearish divergence on the MACD

Daily chart

VNO V IYR DAILY RTT

  • The 14 day RSI first formed divergence above 70 in March (first dashed line) then another divergence below 70 (second line), coinciding with the weekly divergence
  • This meets my ideal RSI divergence criteria

Summary

From the low in May 2013 to the high on 02 June, VNO has outperformed IYR by 29.6%. This year of outperformance is likely over and there could be a significant pull back.

 

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