I view the Homebuilding Sector ETF (XHB) chart pattern from October as a developing base that is maturing ahead of a counter-trend period that should propel prices above the December recovery high near 13.80 towards a confrontation with the declining 200 DMA, now at 17.48. However, initial resistance along the way starts at 13.60 and extends to 14.60/70, at which point I will have to determine whether or not to hold our model portfolio long position or to exit, looking to re-enter into weakness. For now, as long as 12.00 contains any forthcoming weakness, I am "friendly" to the homebuilding sector.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.