XHB (Homebuilders ETF) will trigger a short entry on any move below 30.60. Suggest stops are 31.60 if targeting T1 & 32.10 if targeting T2. I’ve also reviewed all of the individual charts of components of XHB and found numerous trade setups for those preferring to short individual stocks vs. the ETF. The advantages to trading a sector ETF lies primarily in the diversification amongst many individual stocks. If one of the components of the ETF has a news driven event that causes a large gap in the stock that goes against your position, your losses would be mitigated whereas being on the wrong side of a gap while holding an individual stock can lead to a loss of 10% or more that might bypass and exceed your stop-loss order. However, the primary advantage to trading individual stocks over a diversified ETF is that one can find the most bullish or bearish stocks within a particular sector and, if successful, book much larger profits as you don’t have the “dillution” of returns caused by the other components of that ETF that invariably move contrary to the primary trend of the sector.
The recent volatility in the market probably makes trading tough for all but the most nimble & experienced traders. Market updates & trade ideas have been on the lighter side lately as I’ve been working on some non-trading related projects which should be wrapped up by the weekend. I’ll see if I can post some of the trade setups of the individual homebuilding/home improvement related stocks later today. I’ll also post a live chart link on XHB if & when a short entry is triggered on a move below 30.60.
XHB daily April 30th