SHW (Sherwin-Williams Co.) is one the components of XHB (homebuilders ETF) that is the first to break below a plethora of bearish rising wedge patterns among the various components of that ETF. I had already label this chart with the price targets shown but as the setup was not posted in advance & more importantly, the stock is already trading down over 5% & no longer offers an optimal entry. As such, this is not an official trade at this time. However, SHW is on watch for a potential short entry should it bounce back and/or I continue to see additional components of XHB & ITB breaking down.
The homebuilding sector was the only bearish sector covered in yesterday’s videos of the 5 sectors/commodities that stand out as setting up for potential shorts although I will also be posting some bearish setups on the transportation sector soon, particularly the railroad stocks. While the primary trend in the major stock indices is still bullish, this market has been marked with quite a bit of sector rotation in recent months & as such, there will continue to be plenty of trading opps on both the long & short side.