real estate income (a) You don’t like the environment of rising prices, especially when it comes amid concerns about the real estate market and a broad bear market in stocks.
By the way, here are my favorite Bank of America REITs.
The Federal Reserve continues to raise interest rates recently by 0.75 percentage points. Meanwhile, the S&P 500 is now at 52-week lows.
Real estate income has been hit. The stock has been down for six straight weeks and is down 3% so far this week.
This inflated the dividend yield to 4.9%. Remember, this company pays its dividend monthly and has raised those payments in 99 consecutive quarters.
If it happens again, it will be an amazing 25 consecutive years Quarterly increments.
Let’s take a look at the graphs.
Real estate stock trading income
Real estate income has been hit hard during the COVID sell-off. Within weeks, it was down 55% from its all-time high in February to its lowest level since 2013.
Unlike the rest of the market, this REIT has not regained its old highs.
Throughout 2020, the $62.50 area has been a strong resistance. This level was restored in May 2021 and then became strong support.
Even when the market was hitting new lows in June, Realty Income stock was holding this area as support.
But last week, stocks closed below this vital area, and with this week’s move, we are seeing a downward acceleration.
While stocks are feeling oversold, there isn’t much support around.
Investors need to be careful if they are buying near current levels. While the yield is attractive, the 10-year yield is close to 4%. Is Realty Income’s current 4.9% return sufficient to justify additional risk?
On the bounce, we need to see the stock retake the $62 to $63 area. If so, it puts the 200-week moving average into play.
If the $62-$63 area rejects the stock, more downside is possible.
On the downside, I am watching a 50% retracement near $56, which was also a major support area in 2021.
Below that, my eyes drift to the $51 to $52 region, where we find a 61.8% retracement and a gap-filling level dating back to 2020.
At this price, Realty Income stock will have a reasonable risk/reward balance from a technical analysis perspective and pay a return north of 5.6%.