From the desk of Tom Bruni @BruniCharting
Last week I posted the mystery chart pictured below to see what people were thinking once they removed the biases of knowing the security name, timeframe, or etc. and had only price to rely on.
Well, the *rough* results are in and
- 50% said do nothing because of the opportunity cost;
- 25% said buy; and
- 25% said sell
With that said, the big reveal is here and the chart is…an inverted weekly chart of the Homebuilder ETF ($XHB). Did that change your answer? If so, why or why not?
To me, this looks like a classic breakout and retest, with prices above a rising 200-week moving average and momentum in a bullish range. Although there is a wide disparity of performance in the underlying components, the reward/risk is still skewed in the bulls favor here and would suggest looking to either own the ETF if it’s above 38.50 or focus on the names in the sector showing relative strength.
I’ve done a deep dive into the sector for premium members of Allstarcharts where I outline the best and worst names with our risk management levels and price targets.
Thanks for reading and let us know if you have any questions!