This REIT Could See Some Headwinds in December

DLR's recent rally could be over

Digital Content Manager
Nov 30, 2022 at 1:28 PM
facebook twitter linkedin

In August, we warned against investing in real estate investment trusts (REITs) in the coming month, based on miserable seasonality trends and a slew of other factors. One of the names that we highlighted was Digital Reality Trust Inc (NYSE:DLR).

Our prediction, for DLR specifically, wound up being spot on, as the equity began its plummet toward its Oct. 13, six-year low of $85.76 in the middle of the month and wound up losing almost 20% in September -- marking its worst month on record. 

Since this low, however, DLR has enjoyed a notable rebound. The security is set to string together it's second-straight monthly win, and gapped above recent pressure at the $102 mark in mid-November. This could be the extent of the rally, however, as the REIT loses steam near the 80-day moving average.

In fact, this trendline has had historically bearish implications in the past, according to a study from Schaeffer's Quantitative Analyst Rocky White. This data shows that DLR has seen five similar occurrences during the last three years. One month later, the security was lower 80% of the time, averaging a 2.5% drop. A similar move from its current perch would put Digital Reality Trust stock at $105.80. 

dlr nov 30

The stock could be ripe for a round of bear notes. Of the 15 in coverage, all but four call it a "buy" or better. Plus, the 12-month consensus price target of $125.53 is a 15.8% premium to current levels. 


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners