I continue to believe that the bond conundrum is ending, and although I do not share the nearly consensus view that housing is a bubble, there could be a plateau. This is evident in housing stocks, which have settled in trading ranges . But today I set my screens to the Real Estate Investment Trusts (REITs) and found nine names that are more than 40% overvalued according to my models -- which is a warning that these stocks should be sold on strength.

The combination of those valuations with the fact that the yield on the 30-year appears to be heading for 5% and higher in 2006 means REITs are vulnerable.

Therefore, I set my screens on the industry to identify companies that are at least 40% overvalued with hold-sell ratings according to my model. The result was clear: These nine REITs are overvalued and investors should be prepared to sell on strength. Some of these stocks have patterns similar to the housing stocks, and some had new 52-week highs just last week. Here are the names that should be sold on strength.

Arden Realty ( ARI) owns and manages commercial office properties located in southern California. Its shares are 51.2% overvalued, with fair value at $30.24. The weekly chart profile is overbought with the five-week MMA at $42.93. My quarterly value level is $41.98 with the 52-week high set on Friday at $45.80. Shares were recently trading at $46.08. There are no risky levels for ARI, so additional new highs are feasible. The close for November will become an input to my model and I will follow-up with a risky level if one is generated.

Crescent Real Estate Equities ( CEI) owns and manages a portfolio of premier office buildings throughout the U.S. Shares are 44% overvalued with fair value at $14.14. The weekly chart profile is positive with the five-week MMA at $20.02 and the 52-week high at $20.82 set on Oct. 10. Friday's close was right on a monthly pivot at $20.36. My annual value level is $16.16 with a quarterly pivot at $21.35 and annual risky level at $27.27. Shares were recently trading at $20.42.

General Growth Properties ( GGP) has a diversified portfolio of properties throughout the U.S. They also develop and sell land for residential, commercial and master-planned communities. Shares are 140.5% overvalued with fair value at $18.55. The weekly chart profile is positive with the five-week MMA at $42.51 and the 52-week high at $47.48, set on Aug. 2. My annual value level is $28.45 with quarterly risky levels at $46.67 and $48.25. Shares were recently trading at $45.05.

Macerich Co. ( MAC) owns and leases regional and community shopping centers throughout the U.S. Shares are 53.1% overvalued with fair value at $43.65. The weekly chart profile is positive with the five-week MMA at $63.91 and the 52-week high at $71.22, set on Aug. 3. My annual value levels are $45.33 and $43.31 with quarterly risky levels at $72.73 and $76.15. Shares were recently trading at $66.68.

Public Storage ( PSA) owns and operates self-storage facilities in the U.S. Shares are 42.7% overvalued with fair value at $49.14. The weekly chart profile is positive with the five-week MMA at $66.37 and the 52-week high at $70.60, set last Friday. My semiannual value levels are $61.09 and $58.96 with quarterly pivots at $70.53 and $71.34, and monthly risky levels at $72.17 and $72.70. Shares were recently trading at $70.04.

Shurgard Storage Centers ( SHU) develops and operates self storage centers for personal and business use in the U.S. and Europe. Shares are 57.4% overvalued with fair value at $36.86. The weekly chart profile is positive with the five-week MMA at $55.12 and the 52-week high at $59.30, set last Thursday. My semiannual value levels are $48.31 and $44.77 with quarterly pivots at $50.45 and $52.80, and a risky level at $58.80. Shares were recently trading at $57.88.

Simon Property Group ( SPG) owns and operates regional malls and community shopping centers. Shares are 54.7% overvalued with fair value at $49.90. The weekly chart profile is positive with the five-week MMA at $72.43 and the 52-week high at $80.97, set on Aug. 3. My semiannual value levels are $69.29 and $65.81 with a quarterly pivot at $77.70 and quarterly/monthly risky levels at $79.93 and $81.00. Shares were recently trading at $76.99.

Taubman Centers ( TCO) owns and manages regional retail shopping centers in the U.S. Shares are 62.3% overvalued with fair value at $21.29. The weekly chart profile is positive with the five-week MMA at $32.50 and the 52-week high at $36.34, set on July 11. My semiannual value levels are $32.02 and $30.62 with quarterly/monthly risky levels at $35.88 and $36.35. Shares were recently trading at $34.76.

Vantas ( VTR) owns and leases health-care related and senior housing facilities in the U.S. Shares are 64.6% overvalued with fair value at $19.26. The weekly chart profile is positive with the five-week MMA at $30.74 and the 52-week high at $32.70, set on Oct. 10. My semiannual value levels are $30.98 and $29.94 with quarterly risky levels at $36.10 and $37.48. Shares were recently trading at $31.99.
Richard Suttmeier is president of Global Market Consultants, Ltd., chief market strategist for Joseph Stevens & Co., a full service brokerage firm located in Lower Manhattan, and the author of TheStreet.com Technology Report newsletter. At the time of publication, he had no positions in any of the securities mentioned in this column, but holdings can change at any time. Early in his career, Suttmeier became the first U.S. Treasury Bond Trader at Bache. He later began the government bond division at L. F. Rothschild. Suttmeier went on to form Global Market Consultants as an independent third-party research provider, producing reports covering the technicals of the U.S. capital markets. He also has been U.S. Treasury Strategist for Smith Barney and chief financial strategist for William R. Hough. Suttmeier holds a bachelor's degree from the Georgia Institute of Technology and a master's degree from Polytechnic University. Under no circumstances does the information in this commentary represent a recommendation to buy or sell stocks. While he cannot provide investment advice or recommendations, he invites you to send your feedback -- click here to send him an email.

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