The Real Estate Select Sector SPDR Fund (XLRE) popped up as a top performing exchange-traded funds (ETF) in the past week. One of our favorite ways to find potential trading ideas is to look at the individual holdings of hot ETFs. Simon Property Group, Inc. (SPG) is XLRE’s 10th largest holding at 3.51% of the portfolio. (1) SGP is a real estate investment trust engaged in the ownership of premier shopping, dining, entertainment and mixed-use destinations and an S&P 100 company. The diversified REIT recently broke a downtrend and looks to have an attractive reward to risk ratio in the near-term. SPG gapped higher on Wednesday, August 10, 2022. Shares closed at $108.01 on the 9th, opened at $110.51 on the 10th, and closed at $111.38. Many times, a gap higher during an uptrend can be confirmation that the trend will continue.
In our chart watching opinion, the first firm level of resistance for Simon Property Group’s shares is at $125 with the 200-day hovering above at $129.07 and falling. There are a few potential technical detours along the way that could stall SPG shares at $115 and $120, but there isn’t a lot of traffic at either price. As long as the overall market continues to trend higher, bulls should be able to bypass $115 and $120 without too much effort.
On the downside, our first point of concern would be a close below support at $105 and then more cornering if SPG finished below the 50-day benchmark of $102.03. As we type, Simon Property Group trades at $111.38.
Potentially, the REIT could offer nearly $18 upside to its 200-day mark and a little more than $6 downside to its initial support level of $105. Longer-term, growth and income investors might like SGP’s current dividend yield of 6.48% ($7 per share annually).
Swing/day trading is only for the most aggressive investors who can afford to lose money in a very short period.
1 – https://www.ssga.com/us/en/individual/etfs/funds/the-real-estate-select-sector-spdr-fund-xlre