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Tuesday, August 21, 2012

XHB homebuilder ETF

I have seen lots of positive comments on the recovery of the housing market lately.  I thought it might be interesting to take a look at the sector.  Lets start out with the weekly chart.

The correction in XHB this spring took it back down to the area of prior highs which held as support.  Last week it appears to have broken out above multiple tops from earlier in the year.  That break out came on a blue bar so XHB was above the upper Bollinger band.  It is also above the upper rail of the upward sloping regression channel making it over bought.  Lets zoom in to the daily chart.

We have a protracted trading range with a recent break out.  The volume pattern here is not all that great.
There was no volume surge on the break out.  The volume average is falling noticeably in the last few weeks.
I think this break out is a little suspect.

Lets zoom out to the monthly chart.

There is some congestion of price in this area from back in 2008.  There could be some resistance up to the $25 area, but it is not real clear that is the case.

Here are some daily charts from some of the home builders in the XHB ETF.

I don't see anything in the home building charts to get particularly excited about.  PHM is the only one making new highs for the year that doesn't have falling volume.

With the XHB weekly chart in overbought territory there needs to be true momentum in this sector to keep prices going.  The volume is very suspect on the last breakout and lacking in the underlying home building stocks.  The chart is constructive as long as it stays above $22, but not particularly compelling to me.


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