SPDR S&P Homebuilders ETF (XHB) — This exchange-traded fund (ETF) seeks to replicate the performance of an index derived from the homebuilding segment of a U.S. total market composite index.
XHB bottomed in March 2009, and in mid-July it executed a gold cross, which indicated that its long-term trend was about to change. By early August, it had followed through by establishing an uptrend.
Since then, it has been trading in a broad consolidation that broke higher in March 2010 under heavy accumulation. And yesterday, the stock blasted out of a narrow channel on very high volume.
Some will no doubt suggest that yesterday’s action was a short-term buying climax. But I’d argue that it looks more like the beginning of a major bull market in homebuilding stocks.
With a target of $29, this could be a good time to enter XHB.
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