A Look At Realty Income's Highly Volatile Price Action

It’s way up, way down, way up and way down again for Realty Income Corp. O this year, as you can see on the daily price chart for the real estate investment trust (REIT):

The price charts of other REITs show a certain amount of volatility but most aren’t moving with this kind of ferocity. That’s almost a 12-point move from the late February low of $62.50 to the April high of $74, a 15.5% gain in about two months' time.

Then, from that $74 April peak, Realty Income’s price sold off to below the February level. The mid-May low is just below $62 on an intraday basis. That’s a drop of 16.2% before buyers showed up again. The late May peak of $68.50 brought the REIT to a new 2022 low of $61.55 by mid-June.

What happened next? Another big rally. This time, the price headed up to a new 2022 high of $75.55 (intraday). It didn’t because selling returned and the REIT steadily declined into mid-September, back down to the $63 level.

One of the reasons for so much up and down could be investors continually re-thinking how much REITs like Realty Income might be affected by the Fed’s likely move to raise interest rates. The company pays a significant dividend — 4.63%, making it vulnerable to re-sets in the fed fund rate. Rate changes may affect the values of its underlying properties.

See also: This Little Known REIT Has Produced Double-Digit Annual Returns For The Past Five Years

Here’s the weekly price chart of Realty Income for a somewhat longer-term view.

That’s an extraordinary rally from the March 2020 pandemic low up to the recent $75+ high. It wouldn’t be all that unusual for a REIT to take a breath after such strong bullish market action. That late September 2021 low near $60 looks as if it might be a significant support level. A close below that would be concerning from a price chart analysis viewpoint. 

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Not investment advice. For educational purposes only.

Charts: Courtesy of StockCharts