XHB – Homebuilder Sector Analysis & Trade Ideas (video)
An update on XHB (homebuilders ETF) and some of my favorite trade ideas in the sector at this time.
Homebuilder Sector Overview (Video)
For those wishing to skip ahead to the analysis of a particular stock or ETF, the following trade ideas are discussed in this order: XHB, AOS, LOW, LL, DHI, HD, LEN, LZB, MAS, LII, MHK, WHR, & TPX.
Trade Ideas Update
I've spent most of the morning reviewing the charts on all of the active trade ideas. While all the active longs still look fine, the short trades is a mixed bag right now: Some with nice embedded gains, some close to entry/breakeven, some close to their suggested stop level and some that have already exceeded their previously suggested stop criteria & need to be removed from the Active Trades category (and into Completed Trades). Those completed trades and their reason for removal are as follows: [...]
HD short update
HD is one of the active short trades in which I've made the decision to leave active even though it recently exceeded the previously posted suggested stop level by a modest amount (~3%). Like so many stocks at the top of what could likely prove to be a significant market top, prices are usually stretched to the very limits, if not just beyond the limits of where the bearish patterns are typically "undone" or negated. For example, textbook rising wedge breakdowns, such as we had recently in HD, will go on to make new highs, often backtesting the broken wedge pattern [...]
HD short update
While I updated the active trade ideas yesterday, removing all of the completed trades, I am spending some time on the trade setup category today. The first update is to the previous HD short setup. This trade actually triggered a short entry shortly after the setup was posted (on a breakdown below the ascending channel). Prices have since pushed back up to the entry level which once again offers an objective short entry on the stock. Targets remain as previously posted and the suggested stop will be on a move over 66.05 (slightly above the recent highs). Previous & updated charts [...]
HD short setup update
I'm still waiting for an entry on the HD short setup and wanted to update the chart, as I believe this trade will have a high probability of playing out soon. Note that I have added a sub-trendline (green line) to just below the ascending channel. That sub-trendline captured the two prior brief spikes below the primary uptrend line and I think it would be prudent to wait until that sub-uptrend line is taken out before establishing a short position. I've also added a horizontal support level which may or may not produce a reaction if/when prices break down below the [...]
HD short setup update
I was very close to shorting HD near the highs yesterday morning and adding it to the site as an active trade. If you recall, I posted the short setup on Monday, to be triggered on a break below the ascending channel/primary uptrend line. Before the open Tuesday, HD announced better-than-expected earnings and triggered what I felt at the time was most likely an exhaustion gap in the stock. As there were already a ton of active short trades on the site (and in my trading account), I decided to wait and see how the stock followed thru today. As you [...]