Time to Build a Position in XHB

By Sam Collins,

Shutterstock photo


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. 

Related Articles:

Double Your Money on the Rumor AND the News
Most investors are spectators at best -- or victims at worst -- in the feeding frenzy that surrounds earnings season. But at The Winning Edge , we cut through the haze of rumor and manipulation to determine where the smart money is headed next. Then we simply "tag along," for another 50%, 110% or 200% gain. Discover how in your free copy of Double Your Money on the Rumor AND the News.

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

This article appears in: Investing Investing Ideas
Referenced Stocks: ETF , XHB

More from Sam Collins


Sam Collins

Sam Collins

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by BankRate.com