Worst Over for Financials and Home Builders?
By Mike Paulenoff, www.MPTrader.com
This is a bottom-fishing expedition, but my technical work on the Home Builders ETF (AMEX: XHB), sentiment, and the relatively strong action in Citigroup (NYSE: C) today despite continued bad financial press questioning its capital base, its breakup value, and the efficacy of its new leadership team all suggest that the "worst" names within the worst sector are about to recover.
Another interesting angle on the housing and home building sectors is the relationship with the dollar. The greenback has turned up against the Euro recently-- and looks to me like it has significant upside recovery potential. Based on the enclosed comparison chart, perhaps the XHB is on the verge of a powerful recovery too?