Developing Base for Home Builders

Developing Base for Home Builders
By Mike Paulenoff, www.MPTrader.com

I view the Homebuilding Sector ETF (AMEX: XHB) chart pattern from October as a developing base that is maturing ahead of a counter-trend period that should propel prices above the December recovery high near 13.80 towards a confrontation with the declining 200 DMA, now at 17.48. However, initial resistance along the way starts at 13.60 and extends to 14.60/70, at which point I will have to determine whether or not to hold our model portfolio long position or to exit, looking to re-enter into weakness. For now, as long as 12.00 contains any forthcoming weakness, I am "friendly" to the homebuilding sector.


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