Relative weakness makes some REITs more attractive, says Fairlead's Katie Stockton

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But your next cast says that relative weakness has made some rets attractive candidates at least to her and there is one in particular she has her eye on. That is our friend Katie Stockton, founder and managing partner of Fairlead Strategies. Someone that bailed me out of fast

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money a couple nights ago as well Katie. So I do I do appreciate it. First off, before we get the name real estate has stunk. Do you like the whole group or is it really just that one name we're about to talk about?

Katie Stockton (Founder & Managing Partner) 00:28.320

You know the whole group in a way if you're if you're interested in turnarounds, then we can certainly find a lot of those in the REIT sector. Although they don't all look the same, of course. If you look at Welltower as one example, ticker is WELL. That's been a big winner

Katie Stockton (Founder & Managing Partner) 00:43.440

within the REIT sector. It's like the biggest component of the sector right now, but the sector as a whole is only about 2% of the S&P 500 in terms of market cap. So it's pretty wild when you get this very small sector, it's been underperforming. And in a way, it's intriguing if

Katie Stockton (Founder & Managing Partner) 01:00.400

you think that the leadership of the market, so technology or even a well tower type of chart is more likely to correct, which is what we think, then you might start stifling around among these turnaround plays.

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And one of those is really not a turnaround, I guess, Avalon Bay. Avalon Bay, it feels like when you live on the East Coast that they're putting up apartment complexes pretty much everywhere, at least in New Jersey. It's a name you like. You're known of course for looking more

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at the technicals. What is the chart on AVB look like.

Katie Stockton (Founder & Managing Partner) 01:32.320

Yeah, I see them around too, but we we've seen it also from the stock a cyclical downtrend despite the activity. So that downtrend finally is showing signs of downs at exhaustion on a long-term basis and then also intermediate term momentum's improving. If you go way, way back

Katie Stockton (Founder & Managing Partner) 01:49.680

and zoom out on Avalon base chart on a monthly bar, there's an oversold condition for the monthly stochastics and that's being enhanced by the de Mark indicators. De Mark indicators have been pretty good in inflection indicators for Avalon Bay historically. So that's intriguing

Katie Stockton (Founder & Managing Partner) 02:05.920

from a long-term perspective after this cyclical down move. But then also you add on that improved relative performance that improved weekly MACD showing better momentum this really just the past month or so. And now we have a minor breakout above some former resistance, which

Katie Stockton (Founder & Managing Partner) 02:23.360

was right around 183. And you know, collectively, it does suggest that we could see a much better year for Avalon Bay. Many of its peers have a similar setup at Mid-America, which is MAA, Essex Essex Properties, which is ESS. We have a lot of names that we could highlight to

Katie Stockton (Founder & Managing Partner) 02:39.680

that end.