Monday, August 21, 2023

XHB Chart Analysis: Homebuilders ETF Rounding Top

I drew a long-term internal trend line on ETF XHB and it shows that there is room to fall on the downside. It is still in an uptrend but got short-term overbought. The housing industry was down today even as large gains in tech and semi's came.

When we zoom in on the chart there are clear support levels that have been broken. This breakdown has confirmed a "rounded top pattern". I see a short setup on homebuilders and a move down to trend support as the target. The major names like DRH, BZH, LEN are tracking pretty closely. I'm going to watch Lumber Liquidators Flooring ticker LL to see if it can actually hold this bull flag. If not and a breakdown below $3.75 occurs I think it is a good short as they have struggled with the fundamentals.

No comments:

Post a Comment