This REIT is Ready to Breakout
Real Estate Investment Trusts (REITs) are securities that invest in property and trade like a stock. REIT's generate revenue from rentals or mortgages, and they offer investors a way to invest in real estate (residential and industrial) without actually owing property. REITs are a consideration for longer-term investors since they generally offer high-yield dividends.
While REITs are generally bought for the dividend, they also have exposure to capital gains/losses. When buying a REIT, don't let the dividend yield be the only consideration. You may get a 6% dividend, but then you could end up with a losing investment if the price of the REIT declines more than 6% below your purchase price. However, if the purchase is timed well, REITs can offer a double win--dividends plus capital gains.
Colony Financial (CLNY) is a diversified REIT, meaning it may invest in various types of properties, such as offices, hotels, residential, and retail. It currently pays a 6.20% dividend.
Over the last six months, CLNY has formed a "weekly" cup pattern. Last week it reached the old high of $22.35 (left side of cup). On Monday, 16 June, it closed down, and this may be part of a weekly "handle" that could form over the next few days to weeks.
At the same time, CLNY is in a position where it could break out any day, since not all cups form handles. A valid breakout would be a close above $22.45 on above-average volume. If this occurs, the only remaining resistance is at $22.73, the May 2013 high. It's important to understand that timing the entry is primarily for risk management, not for any potential gain.
Important Disclaimer:
The information presented in the ProSelect Stock Report is for informational purposes. The information was based on data and charting programs from independent services and CC Trader LLC d/b/a TradeLikeaPro does not guarantee the accuracy of the information used in the analysis of securities presented. The information is not offered as a guide for trading ideas and setups. Investors and traders should conduct their own independent research before making any investment. Nothing contained herein should be construed as an automatic recommendation to buy or sell any listed security. Investing and trading involves risk. Before deciding on any investment, you should consider your investment objectives, level of experience, and risk tolerance. Do not trade with money you cannot afford to lose. You should seek investment advice from a professional investment adviser before engaging in investment activities.
Traders should check numbers for accuracy before relying on them for trading decisions because typographical errors will sometimes occur.
(c) CC Trader LLC d/b/a TradeLikeAPro 2014. All Rights Reserved.