From a technical standpoint, this could simply be an oversold bounce for the builder ETFs. Also, ITB has seen the 50-day moving average cross below the 200-day moving average.
Homebuilders came into Thursday’s session as “one of the most oversold groups,” said Jonathan Krinsky, a technical analyst at Miller Tabak, in a MarketWatch report. He said even with a spike higher in rates, builders managed to make “red-to-green reversals.” The NAHB news helped, he said, but it also means a “short-term reversal could be in place.”
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Full disclosure: Tom Lydon’s clients own XHB.