Time to Build a Position in XHB

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SPDR S&P Homebuilders ETF ( XHB ) -- This exchange-traded fund ( ETF ) seeks to replicate the performance of an index derived from the homebuilding segment of a U.S. total market composite index. 

XHB Stock Chart  

Chart Legend

XHB bottomed in March 2009, and in mid-July it executed a gold cross, which indicated that its long-term trend was about to change. By early August, it had followed through by establishing an uptrend.

Since then, it has been trading in a broad consolidation that broke higher in March 2010 under heavy accumulation. And yesterday, the stock blasted out of a narrow channel on very high volume. 

Some will no doubt suggest that yesterday's action was a short-term buying climax. But I'd argue that it looks more like the beginning of a major bull market in homebuilding stocks.

With a target of $29, this could be a good time to enter XHB. 

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas

Referenced Stocks: ETF , XHB

Sam Collins

Sam Collins

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