I like First REIT and it is a large investment in my portfolio. Although, fundamentally, I think 72.5c/unit is a fairly attractive price, technically, it looks rather weak. This is why I have not added to my long position in the REIT in the current environment.
Technically, the REIT tested resistance at 72.5c in the last session on the back of low volume. If it did manage to break immediate resistance, it would meet with resistance at 73.5c and 74c. If volume stays tepid, chances of resistance at 72.5c being overcome are rather low. Of the 450 lots which changed hands in the last session, 321 lots were sold down at 72c.
The downside proposition looks stronger. The rising 200dMA should provide stronger support at 70c which is a psychologically important round number. I would probably add to my position closer to this level. Having said this, I might be seeing the beginnings of positive divergences on the daily chart and we could see price rebounding quite smartly if they are valid.
Referring to the weekly chart, it is quite obvious that the uptrend is intact and this, to me, means that any short term weakness is an opportunity to accumulate on the cheap.
Related post:
First REIT: Is the bear just resting?