Technical Strategy Video (Recorded Wednesday, October 13th):

The video in this report is only accessible to members
The video in this report is only accessible to members

Key Takeaways

  • Home construction and Builder stocks look to be turning back higher, with convincing movement back to new all-time highs in LOW, BLDR, while XHB has stabilized and readying for its own breakout
  • Lumber has shown good correlation with XHB, the Homebuilders ETF in recent years, both having peaked out this past Spring. Lumber now breaking back out higher.
  • Lumber cycles which peaked in the spring now bottom in October and turn higher into December of this year. It’s thought that Builders should benefit from this rally

Stabilization in $XHB (SPDR Trust Homebuilder ETF) which has helped momentum to stabilize a bit has given way to breakouts in the downtrend from the last couple months in many prominent names like Lennar ($LEN) Builders Firstsource ($BLDR) which are both favored in the space. It’s right to position long in XHB technically, looking to add above $74.

The video in this report is only accessible to members

Lumber breakout of its multi-month reversal pattern bodes well for strength

Lumber’s 70%+ decline from May highs finally looks to be turning back higher following this week’s breakout. As seen below, Lumber churned sideways in consolidation ...

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