Housing Stocks: Potential Short
Above is a 7 month daily chart of the home building stocks. Today the index tested its 50 day moving average and closed lower on the day.
These stocks are much weaker than the market so I view this 7 day rally as a potential shorting opportunity within a downtrend. The slope of the 50 day moving average is down so the intermediate term trend is down.
Notice the stochastics are making a higher high while price is making a lower high. This is called reverse divergence and is usually a good indication of a down move coming in the near future.
I haven't shorted any homebuilders yet, but I wanted to post this chart here to let you know that I'm looking to possibly short this group of stocks in the next few days.
Posts
![[Most Recent Charts from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_4.gif)
![[Most Recent Charts from www.kitco.com]](http://www.kitconet.com/charts/metals/silver/t24_ag_en_usoz_4.gif)
![[Most Recent Exchange Rate from www.kitco.com]](http://www.weblinks247.com/exrate/24hr-euro-small.gif)
4 comments:
There are big housing reports this week - could move those stocks a lot
I know...that's what I'm waiting for. I'd like to see bullish numbers but bearish stock action... If i see that, I'll short without hesitation.
Well, you'll probably see bearish numbers...
If you look at XHB instead, you will see that the stochastics and price have actually made higher highs (very marginally - or maybe it's a coin toss) together in the last two months. Does this matter in the outlook?
Post a Comment