Mind Your Moving Averages - Homebuilders Edition
$XHB
I posted about the Homebuilders XHB 0.00%↑ one month ago -
I’m using the XHB 0.00%↑ for illustrative purposes here, but if you drill down into the ETF’s components, you’ll notice similar trends for the individual names. (I’m personally long TOL 0.00%↑ at this time, in addition to XHB 0.00%↑ )
Plotted above are the simple and exponential 200 day moving averages for XHB 0.00%↑. You can see the variance in the two, a pattern similarly observed back in 2022. The individual names are exhibiting similar patterns, and I’m personally watching the price action around both to see if there’s a breakout or breakdown. The price action over the past month has been strong enough to push many above EMA 200, but as they now cross SMA 200, will it be a clean break, or will a pullback occur?
I want to build positions in the names that break out from both here. We saw a pullback in 2022, before the sector went on a tear. The pattern appears to be repeating, but patience may be required.