The homebuilders sector and its corresponding exchange traded fund (ETF) SPDR S&P Homebuilders (XHB) have been the worst performers so far this year, and it hasn’t even been close. Still, many speculators are sticking their toes in the water thinking it might be safe to do some bottom fishing.
Chip Hanlon from GreenFaucet.com advises against it. "I can’t believe how many people are still looking at the homebuilders, trying to figure out when they’ll be a good buy…The short answer to that question is: not yet.
Normally, I’d like the idea of buying the down-and-out sector from a contrarian standpoint, but the fact that so many people are asking whether homebuilders are worth trading suggests a real negative sentiment extreme hasn’t yet been reached in this group, as amazing as that sounds."
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.