Federal Realty Investment Trust of Rockville is negotiating to sell itself, the Dow Jones news service reported yesterday.

Executives of the trust could not be reached yesterday. For the past three days, the price of the company's stock has been climbing on much heavier than usual trading volume, rising nearly 10 percent this week.

Federal Realty owns more than 100 strip shopping centers in this region and around the country, including such large local centers as Congressional Plaza in Rockville and Loehmann's Plaza in Fairfax County.

Like many other public real estate investment trusts (REITs), its stock price has been anemic much of this year even though its underlying business has been growing and profitable. In the first six months of this year, Federal Realty's funds from operations per share, the usual measure of a REIT's results, grew 12 percent.

The reasons for the stock weakness throughout the sector have baffled many analysts, because the fundamentals of the commercial real estate business are stronger than they have been in about a decade.

"Investors have spoken. The broad market goes down, and REITs go down. The market bounces back up, and REITs go down," analyst David Sherman of Salomon Smith Barney wrote in a recent report.

Industry analysts have been saying for some time that the combination of low stock prices and strong businesses could lead to an increase in merger and acquisition activity for REITs. There have been few notable deals this summer between public companies, though. There have been more cases of public companies going private.

In its report yesterday, Dow Jones cited "people familiar with the situation" as saying Federal Realty's sale could be announced as early as next week, and that the price would be from $25 to $27 per share.

Over the past six months, Federal Realty's stock price has averaged about $22.45 a share. It started out this week at just under $22 per share.

But on Wednesday, New York Stock Exchange trading volume in the stock soared. The price closed at $22.62 1/2 that day and $23.31 1/4 Thursday. On Friday, trading volume decreased somewhat and the price rose 62 1/2 cents to $23.93 3/4. For the week, that added up to a 9.4 percent price increase.