One of the more noteworthy developments in recent days has been the move in homebuilders. After peaking in early October, the SPDR S&P Homebuilders ETF (XHB) has been trending lower as traders justify the underlying valuations. Now the question is whether recent pullback is a pause that refreshes or it’s a beginning of something worse? Below is an update look at a trade in the XHB.
The graphic below is from our “U.S. Market Trading Map”, show the near-term technical bias and trading ranges. As shown, the underlying is in a short-term bullish trend when the price bars are painted in green. The underlying is in a short-term bearish trend when the price bars are painted in red.
Chart 1.1 – SPDR S&P Homebuilders ETF (daily)
Our “U.S. Market Trading Map” painted XHB bars in green (buy). Over the past few days, XHB has been trending lower in a short-term corrective mode as it worked off overbought conditions. The correction found support at the 20day moving average. Tuesday’s rally pushed the ETF above the October’s falling trend line, signify…Click here to read more.
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