Revenge of the REITs - 135% return in a week.

Following up from my blog "A-REITs (XPJ) still getting hammered", the REIT sector has performed very strongly over the last few days.

Just to have a recap.....

"I am still of the opinion that large amounts of money can be made investing in the right stock at these historically low levels. GPT (at 27c) and GMG (at 16c) seem to be two of the better punts right now."

As of the close today, GPT was at 49c and GMG closed at 38c. This represents gains of over 80% on GPT and a whopping gain of over 135% on GMG. Not bad for a just over a weeks investment! This looks even better when you factor in that GMG actually closed down 1c today, after hitting a high of 42c.

As I said last week, buying the grossly oversold can lead to very large gains.

Falling through the double bottom. Using a Stop Loss.

One of the great debates in stock trading is the use of stop loss orders. Basically a stop loss order is an order to stop you lossing large amounts a money. How they are used is, if a stock drops a certain percent, you automatically sell and cut your losses. i.e. a stock dropped 5% below my buy price, so I automatically sell for a loss.

Stop losses are particularly handy when trading using charts. Double bottoms can be strong charting signals for picking a reversal, but as seen on VPG and PBG, when a double bottom does not hold, further substancial losses can be seen.

If I see a stock I hold looking to close below its double bottom support, I will usually sell on the close, and look to buy back a few days later at a lower price.

Many people swear by stop losses, whilst many other people just see it as a tool to continually sell stocks at a loss.

Here is a video explaining one view on where to place stops.

A-REITs (XPJ) still getting hammered

Following up on my post about the hard time A-REITs have had lately, the below chart shows just how bad it continues to be.

The XPJ index actually had a rally today up over 4.5%. But this has to be in context of the absolute smashing A-REITs have been copping lately. Today the index closed at 572. It was around 2400 only 15 months ago.

I am still of the opinion that large amounts of money can be made investing in the right stock at these historically low levels. GPT (at 27c) and GMG (at 16c) seem to be two of the better punts right now.