The housing sector is very sensitive to interest rates. So the past several months have been pretty darn good to stocks related to real estate and home construction / builders.
In particular, the Home Construction ETF (NYSEARCA:ITB) and the SPDR Home Builders (NYSEARCA:XHB) have rallied sharply. But both are nearing major price targets within developing price patterns. See charts and commentary below.
As you can see on the chart of theHome Construction ETF (ITB), the price has hit a major resistance level. The $34 level should hold for at least a few attempts, if not longer. And this could produce a correction near-term.
As well, the Homebuilders ETF (XHB) have reached new highs while forming a potentially bearish pattern. This also comes during a cyclical time inflection.
The most important takeaway here is that these levels should provide resistance. AND if they don’t, that simply means that the housing sector is too strong and isn’t ready to slow down just yet.
Best of luck out there. Thanks for reading.
Twitter: @BartsCharts
Author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
