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Heads Up, This REIT Stock Is Displaying Strong Buying Even as Prices Fall

How to play Federal Realty Trust right now.
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Federal Realty Investment Trust (FRT) was reviewed in the middle of March, where I recommended, "Yes, the trend is still down but I like the potential of this trade. Try to buy FRT a little closer towards $115 risking $112 and looking for gains to around $130."

Traders who may have followed that advice should have been stopped out with a small loss. If you don't have a problem with getting back on the horse, so to speak, read the rest of this column.

In this daily bar chart of FRT, below, we can see that prices made a slight new low for the recent move down this month. Prices have popped back above the flat 50-day moving average line and could push up through resistance extending up to $119. The daily On-Balance-Volume (OBV) line is close to making a new high for the move up. The strength in the OBV line looks like it is leading the price strength. The trend-following Moving Average Convergence Divergence (MACD) oscillator has crossed to the upside for a cover shorts buy signal. This oscillator is also close to crossing the zero line for an outright go long signal.

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In this weekly bar chart of FRT, below, we can see that prices are below the declining 40-week moving average line. We know the trend is still down but the other indicators are interesting. The weekly OBV line has been amazingly strong the past three years. The OBV line looks like it is in the process of reversing to the upside with a higher low being established. The MACD oscillator has narrowed and it very near to an upside cross over and cover shorts buy signal.

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In this Point and Figure chart of FRT, below, we can see that a bearish price target of $103.88 is being projected but a trade up at $118.86 would be a triple-top breakout and allow for an upside price target.

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Bottom line: The movement of the OBV line is very strong if it is correct. It is telling us that buyers of FRT have been more aggressive even as prices have fallen. Traders could consider going long FRT above $119, risking to $110. Maybe this time we can see the rally extend to $130.

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