With interest rates so low one would think the housing market is booming. The stocks are acting well, but remember banks are not eager to loan money with little return but lets take a look at some names in the sector, since all we are looking for as technicians is price action. The XHB is higher by 2.1% YTD and if one is looking for a pure play ETF you would be surprised to know on 2 of the top 10 stocks in the fund are (LEN and TOL). If you are looking for more concentration the ITB may be a better fit as its top 5 holdings are all pure plays and it is acting slightly better up 2.8% YTD. Below we look at 3 recent plays in the arena, OC, TPH and DHI. DHI reports earnings Thursday and OC and TPH next week.
OC we looked at in our Wednesday 3/23 Game Plan and it has been a strong performer up 9% YTD and it is higher 8 of the last 9 weeks with all 8 up weeks CLOSING at or in the upper half of the weekly range, a bullish trait. The lone down week ending 3/25 lost less than 1% in the lightest weekly volume of streak (it also finished in the upper half of the weekly range). OC blasted off the round 40 number the week ending 2/19 and it now sits at all time highs above the very round 50 figure. One could wait for a pullback and retest of that number for entry. The stock is now 9% higher that the recommended entry.
Stocks that can be bought after recent double bottom with handle breakouts are OC. OC is prospering on the backs of a recovering housing stock group. The stock is UNCH YTD and up 11% over the last one year period and sports a dividend yield of 1.5%. Earnings momentum is moving solidly in the right direction with 3 straight gains of 2.5, 2.3 and 5.7% on 2/10, 10/21 and 7/22 and a loss of 1.4% on 4/22. OC is on a current 5 week winning streak like the markets and has risen 16% in the time frame. The stock recorded a double bottom during the sessions of 9/30/15 and 2/10 with intraday lows of 38.95 and 38.96 respectively and last Friday took out a double bottom with handle trigger of 46.40. Enter here.