CryptoPaily
Long

Commercial real estate about to crater

AMEX:DRV   DIREXION SHARES ETF TRUST
DRV tracks the inverse of commercial REITs. Ever since the pandemic began several companies have instituted work from home policies.
A large majority of companies will either default or give up on their leases. On the other side hotels & malls are not seeing much traffic either.
All this points to a drastic drop in returns for REITs.
Technicals:
Daily RSI has had higher lows.
Volume is picking up.
MACD turned green and is heading to bullish territory
The price is trying to break a resistance level .

Note: This is not financial advise. Please do your own research.

Comments

Any thoughts on current situation? I would’ve expected DRV to start rising, but it’s been a total reverse so far
Reply
@KthiG,
Yes I am perplexed too!
The macro situation points to the commercial real estate sector going down due to coronavirus and now the riots across the US.
My strong feeling is that the large REITs have received currency from the fed to keep them afloat.
Now it remains to be seen for how long the fed will supply them with newly printed currency while the economy keeps breaking down.
+1 Reply
KthiG KthiG
@CryptoPaily can you shine some light on the effects of compounding for anyone who continues to hold DRV? I assume it makes holding DRV quite risky at this point
Reply
@KthiG, DRV is a 3x inverse etf which is made up of a lot of put options. So there is something called decay. The longer you hold these 3x etfs the more value it loses when the asset is not volatile.
We want more volatility when trading 3x etfs.
It's never a long term hold.
So be careful.
Reply
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