Two-Thirds Chance Home Builders Fall in Price?

By Chris Kimble of Kimble Charting Solutions
February 20, 2013

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What sector had a major impact on the economy and stock market from 2006 to 2009? The Home Construction Index, which fell 90% in price in a few years. What sector has been very hot of late and might have helped pull the broad markets higher? The Home Construction ETF (ITB) is up 3 times what the S&P 500 is up over the past 2 years.

So Goes Home Construction, So Goes the broad market? I doubt it's a simple as that! Most of us are well aware that Real Estate/Home Construction is an important part of the economy.

 

 

The DJ Home Construction index's rally over the past two years has it dealing with its 38% Fibonacci resistance level at the top of a rising wedge. The Power of the Pattern shows us that about two-thirds of the time a large wedge like this leads to lower prices. Will it be different this time?

Members are looking to take advantage of lower prices in the Real Estate complex. If you would like to see why, send an email to services@kimblechartingsolutions.com and ask for our Real Estate Update or click on the box below to receive complimentary charts.

 

 

 

 

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