The London Housing Bubble, Charted

This is the weekly chart of Savills PLC             , real estate provider.

I rarely trade stocks, but sometimes I see an opportunity that piques my interest, because it a) has an interesting chart and b) fits into my fundamental world view.

In this case, I believe that housing is over-leveraged, and is ‘affordable’ only as a result of an artificially low interest rate environment. I especially believe this to be the case in London, which has been subject to an onerous property bubble, which will pop due to simple mean reversion, and Brexit fears.

SVS is my go-to vehicle for this trade. SVS has dropped like a stone form a multi-month consolidation, and it now coming into a support zone . A bounce is to be expected. A kiss of the prior consolidation support-turned-resistance would be textbook. I expect a rejection there, or lower, providing a continuation and measured move to long-term support.

I am short, and will look to add on a multi-week high.

By admin