Suffering REIT Eyeing More Downside

It has been a long and steady decline for self-managed real estate investment trust (REIT) Macerich Co (NYSE:MAC). The equity has lost 45% in the last 12 months, and is deepening these losses today after yesterday's quarterly earnings report, which led to two price-target cuts, including one from Piper Sandler to $26 from $30. Today, MAC is down 5.9% to trade at $23.47, and could be headed toward even more losses, if history is any indicator.

Prior to this recent slide, the security encountered its 40-day moving average after a lengthy period below here. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, this signal has flashed 18 times before in the last three year. One month later, only 11% of these returns were positive, and on average, MAC was down 5.73% after these signals. A similar move, from its current perch, would put the REIT back near its 10-year lows at the $22 level. 

There's plenty of pessimism in the options pits already. MAC's Schaeffer's open interest ratio (SOIR) of 3.60, which ranks in the 96th percentile of its annual range suggests a much bigger appetite for puts expiring within the next three months. Short sellers are echoing this sentiment, with the 33.97 million shares sold short representing nearly a quarter of MAC's available float, or 14 days of trading at its average daily pace.