iShares Dow Jones US Home Const. (ETF) (NYSEARCA:ITB) — This ETF tracks the investment results of the Dow Jones U.S. Select Home Construction Index with at least 90% of its assets invested in the stocks of the underlying index.
The top 10 holdings are D.R. Horton, Inc. (NYSE:DHI), Lennar Corporation (NYSE:LEN), PulteGroup, Inc. (NYSE:PHM), Toll Brothers Inc (NYSE:TOL), NVR, Inc. (NYSE:NVR), Home Depot Inc (NYSE:HD), Lowe’s Companies, Inc. (NYSE:LOW), Tri Pointe Homes Inc (NYSE:TPH), Ryland Group Inc (NYSE:RYL) and Meritage Homes Corp (NYSE:MTH).
ITB has outperformed the market, gaining 20% in the past six months compared with 6% for the S&P 500.
As noted in today’s Daily Market Outlook, the existing home sales report for February will be released today. It is anticipated that sales have suffered due to the rough winter, which had a dramatic impact on both existing and new home sales. However, with the improvement in weather conditions, pent-up demand could exist, which would have a positive impact on ITB.
Technically, ITB has been trading in a well-defined bull channel since the October low at under $22. The bull channel received a push when the 50-day moving average crossed up through the 200-day moving average in a golden cross in early December.
Support is initially at the 20-day moving average at $27.29, then the 50-day moving average at $26.59, and finally, at its bullish support line at about $25.50. My six-month trading target for ITB is $32, which is 15% above current prices; however investors may hold shares for a much higher long-term target.