Extreme Buying Spotted in Real Estate Stocks
Tuesday saw a wicked rally in stocks. Notably, Real Estate names were a major beneficiary of the surge.
Keep in mind that the trend has been heavily skewed to the buyside for nearly all of January. Tuesday points to an extreme level of buying in Real Estate names that could indicate a pullback in the coming weeks.
Let's first take a look at the daily inflows. Below plots the daily buy and sell counts of REITs and Real Estate names based on our algos. Tuesday 1/31/23 saw the most buying in in the group since 2021:
Keep in mind that the trend has been heavily skewed to the buyside for nearly all of January. Tuesday points to an extreme level of buying in Real Estate names that could indicate a pullback in the coming weeks.
Let's first take a look at the daily inflows. Below plots the daily buy and sell counts of REITs and Real Estate names based on our algos. Tuesday 1/31/23 saw the most buying in in the group since 2021:
Now, buying isn't a bear signal. But unsustainable levels of buying can be. Consider the following:
Tuesday's action saw 31% of our Real Estate universe log an inflow signal. Since 2014, 30%+ inflows have occurred 18 times. The forward returns for $iShares US Real Estate ETF(IYR.US$ are on average negative a week and month later:
Tuesday's action saw 31% of our Real Estate universe log an inflow signal. Since 2014, 30%+ inflows have occurred 18 times. The forward returns for $iShares US Real Estate ETF(IYR.US$ are on average negative a week and month later:
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