We have one new setup on today's watchlist in $ITB, in addition to $TBT's setup from last Friday which has yet to trigger.

We are currently long iShares Home Construction ETF ($ITB), but would like to add to the position this week on strength.

The weekly chart is holding support from the 10 and 40-week MAs after clearing the downtrend line, and potentially forming the first weekly higher low within the base.

The volume two weeks ago was the lowest volume candle during the 15-week base, suggesting that sellers have dried up.



On the daily chart, the moving averages clearly point to momentum building, with the 20ema crossing above the 50ma. If the 50ma can begin to trend higher within the next few weeks then all moving averages will be pointing in the right direction.



$ITB looks to be forming a cup with handle type base and should hold above the $23.50 area as it consolidates. A move through last week's high could spark some buying interest and lead to a test of the swing high around $25. A weekly close below the 200-day MA would negate the setup in the short-term.
Deron Wagner is the Founder and Head Trader of both Morpheus Capital LP, a U.S. hedge fund, and MorpheusTrading.com, a trader education firm.