NEW BULLISH Plays
SPDR S&P Homebuilders ETF - XHB - close: 31.40 change: +0.12
Stop Loss: 29.75
Current Gain/Loss: + 0.0%
Entry on May 09 at $--.--
Listed on May 08, 2013
Time Frame: 9 to 12 weeks
Average Daily Volume = 5.3 million
New Positions: Yes, see below
Why We Like It:
You might think that the homebuilders ETF would be filled with nothing but homebuilding stocks but that's not true. About half of this ETF's top ten holdings are home furnishing retailers and similar companies (stocks like BBBY and WSM). There are some homebuilders in the top ten. It seems like the recipe of home furnishings and builders as an ETF certainly is working. With the turnaround in the residential real estate market the XHB is up significantly in just the last 18 months.
The XHB is currently up five days in a row and hitting new multi-year highs. I am suggesting small bullish positions now at current levels. More conservative traders will want to seriously consider waiting for a dip. A pullback toward $30.00 might be a good spot for an alternative entry point.
NOTE: The XHB does have options but I would prefer to see a dip in the ETF before considering call options on it. If you do choose to trade the options I would probably pick the Septembers or 2014 Januarys.
Suggested Position: buy the XHB @ (the open)