Homebuilders ETF Hurdles Resistance

Homebuilders ETF Hurdles Resistance
By Mike Paulenoff, www.MPTrader.com

During the past three sessions, the Homebuilding Sector ETF (AMEX: XHB) has broken and sustained above its 9, 20 and 50 DMA, and has hurdled its May-Dec resistance line. This is impressive action, and has inflicted meaningful damage to the heretofore dominant multi-month downtrend. On one hand, I should have established a new long position last Thurs or Fri, but on the other hand until I actually see the ability of the XHB to break key near-term resistance and sustain above those levels, I decided to take the prudent "show-me" approach. So far so good. With the above-mentioned analysis as a backdrop, my near-term work suggests that I will have an opportunity to enter new long positions closer to the 20.50 area in the upcoming sessions. I will wait for another day or so to see if I can buy into pullback weakness. If not, I will cross that bridge then. In either case, my work argues for continued strength in the XHB into the 25.20/70 target zone before the current initial upleg off of the low is complete.

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