Tuesday, May 21, 2013

Properties index has overshot

The Properties index has moved up very well since October last year when I first posited that property stocks were starting to stir (here). Even back in March this year, property stocks were still relatively 'cheap' when the Properties index was poised for an upside breakout (here). Some are now asking the question: Have property stocks gone too high? Is it due for a correction?

From the chart below, we can see that Properties index has been trending higher in an upward channel. I have dawn an uptrend line, SS and three parallel lines (S1, S2 & S3). Any move above S3-S3 & any move below SS would result in a correction back within the channel. We are now above S3-S3 line and we must be prepared for some correction ahead. If your property stocks are sitting on good profit, I think you may now take some profit.

Chart: Properties's weekly chart as at May 21, 2013_11.45am (Source: quickcharts)

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