The question for REM, the iShares Mortgage Real Estate Capped ETF, is it at a triple-bottom support or on a pause in an obvious down trend before a plummet into oblivion?
But the real question may be — is the technically over-sold condition in REM a sign that all the bad news from the Federal Reserve’s upcoming anticipated interest-rate hike already in the stock? Hard to tell, it is already down eight percent for the year. That may be enough.
The stock, which closed today at $9.91, has a yearly range from $12.69 to $9.76.
The triple-bottom at $9.76 is only a possibility since it always takes a confirming rally to complete the technical formation. That clearly has not happened…yet.
Almost needless to say, the ETF’s current 14.83 yield (as of Oct 31, according to Yahoo Finance) is compelling.
And, at this point the good news for traders, and for long-term investors who refuse to look at red ink each day no matter what the yield, is the stop loss, if the down trend is bound to continue, is nearby. Quite frankly I, for one, do not want to be here if this possible triple-bottom at 9.75 gets taken out (after all this could also be, technically speaking, a massive descending triangle with lots of downside left…gulp!).
(click on image for a larger chart)