It's still risky to place aggressive bets on a recovery in the residential- and commercial-building segments, but one related group is perking up nicely this summer. Real Estate Investment Trusts (REITs) have come off deep lows in recent months, with many grinding out bullish basing patterns and setting up for major breakouts later this year.

As we know, this was an extremely hot group during the real-estate bubble. It turned south along with construction stocks in early 2007, but has held up much better in the last year-and-a-half. This resilience is paying off now, with capital reentering the sector at a healthy pace in hopes the dark days has finally past.

The great variety of REITs makes them an attractive choice for investors seeking exposure to this bear-market group, but also wanting to avoid the most dangerous segments, like residential construction. The hefty dividends commonly paid by these issues also help to alleviate the anxiety of ownership.

I've scanned my databases and uncovered five REITs with excellent price patterns. None of today's list is tied to residential construction, even though I'm pleasantly surprised by the recent performance of this sub-group. It just makes sense to stick with strongest sector components, given all the economic uncertainties.

Digital Realty Trust
Click here for larger image.
Source: eSignal

Digital Realty Trust ( DLR), paying a 2.90% dividend, is a northern California company focusing on technology-related real estate. It rallied to a new high at 42.86 in May 2007 and then pulled back. The stock found support in the low 30s, rallying back to resistance in November and May of this year.

It's been moving sideways for the last two months, completing a broad cup-and-handle breakout pattern. A thrust above 44 will yield a strong buy signal. The weekly view shows the possibility of considerable upside after a breakout, with a run that could carry the stock into the 50s by year's end.

Health Care Reit
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Source: eSignal

Many health care REITs are moving higher these days, as the sector shows leadership in a slowing economy. Health Care Reit ( HCN) is a strong segment player that pays out a 5.40% dividend. It rallied to an all-time high last week in a vertical burst. The trick is to find a low-risk entry because the three-week uptrend shows few pullbacks.

The company reports earnings after the bell on Tuesday. While we don't know how it will react after the release, we might see a sell-on-the-news impulse typical of issues that rally strongly into quarterly earnings results. A pullback lasting two to three weeks and finding support near 47 should mark a good buying opportunity.

Plum Creek Timber Reit
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Source: eSignal

Plum Creek Timber Reit ( PCL) is a timberland REIT with a 3.40% dividend. Its unique exposure to natural resources increases risk, but the company continues to exhibit sector leadership. The stock rallied to a new high at 48.45 in December and pulled back. It returned to that level for the third time in late July, completing a breakout pattern.

Price surged higher last week and spiked into 49.60. It could move sideways for a few more sessions, consolidating its gains before following through to the upside with a rally over resistance at "round number" 50. Despite current momentum, this stock is usually a slow mover best-suited to deep-pocketed investors looking for steady income.

Brookfield Properties
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Source: eSignal

Brookfield Properties ( BPO) is a commercial property developer paying out a 2.9% dividend. The stock fell on hard times in 2007, dropping from an all-time high at 32.81 to the January 2008 low just under 17. It's been moving sideways since that time in a broad rectangle pattern, with support in the mid-teens.

This pattern is setting up nicely as a triple bottom. Recovery volume in March and July was much stronger than after the January low, pointing to the likelihood of a major reversal. But patience is required because it could take another few months for the upside to develop. So, for now, this is a stock for value players willing to wait for decent returns.

Ventas
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Source: eSignal

Ventas ( VTR) is a health care REIT with a hefty 4.5% dividend. The weekly chart captures the volatile price action on this issue since early 2007. It posted a major high at 47.97 just before the ugly downdraft that started in late February. It finally bottomed out in August, after losing nearly half of its value.

Buyers stepped after that low, lifting price back to the high in December. That recovery gave way to another decline that found support just under 40. The stock has been stuck in a rut since that time, trying to overcome resistance between 47 and 50. However, accumulation is rising and the next thrust into the high will complete a breakout pattern. Footer:

Alan Farley provides daily stock picks and commentary with his "Daily Swing Trade" newsletter.

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