Many REITs Look Bearish

Today I was looking at sectors of the market I generally do not look at, and REIT's caught my attention. Looking through several of them, most seem to be currently completing the right shoulder of the head & shoulder pattern. This indicates that this sector has a high chance of falling significantly.

BPO

 BPO shows a classic head and shoulders with a southeast pointing neck-line. Southeast pointing neck-lines generally have a higher probability of  being a successful topping pattern, compared to head & shoulders with horizontal and northeast pointing neck-lines. As a refresher, target zones of head & shoulders are found by measuring the distance from the top of the head to the neckline, then adding that difference under the neckline.



VNO

VNO shows an interesting variation of the head & shoulders pattern, a complex head & shoulders. This is a more rare variation that shows two left and two right shoulders.


CLP

CLP looks like it could be in the middle of forming a double top or possibly in the middle of forming a head & shoulders pattern.



Final Thoughts: There are several REIT's still showing good relative strength, but other REIT's seem to be forming topping patterns, making it a dynamic sector to keep track of. A lot are in the midst of head & shoulder patterns, others possibly in double tops. As with any trade one must wait for confirmation to be successful.