The triple-bullish real estate fund symbol DRN has had its share of volatility the past couple of years. To my eyes, real estate has been one sector clearly entering a bear market. The big question at this point is whether the consolidation we’ve been in the past few weeks is preceding a recovery bounce or a new leg down.
I can’t say for sure, but it seems to me the downtrend is firmly in place. There are few sectors where you see the sort of resolute downward action in all three moving averages that you’re seeing with real estate. This instrument is too jumpy for my taste at the moment, so I’m sticking with IYR. As interest rates continue to heat up, real estate should continue to melt down. Here’s a closer look at DRN with three exponential moving averages: