May 21

Homebuilders Stocks on the Move

Last Thursday with the streetTRACKS SPDR Homebuilders ETF (XHB) trading at 34.50, we wrote that the chart argued for a potent recovery that should hurdle near-term resistance at 35.20 on the way to test the April high at 36.06. Today the XHB has climbed above its Feb-May resistance line at 35, which should trigger upside follow-through towards that critical 36.06 area. A sustained climb above that would be considered extremely bullish near-term and project to 37.50-38. At this juncture, only a sudden reversal and break of 34 will severely compromise the developing bullish (recovery) pattern.
Chart

Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!