“The sector as a whole is now somewhat oversold suggesting that bottom fishers could get active. Technical indicators tracking momentum in the daily time frame agree although in the big picture they suggest there is more downside ahead,” according to Barron’s.
The equal-weight XHB mixes stocks such as Tempur Sealy (NYSE: TPX), Williams-Sonoma (NYSE: WSM) and Restoration Hardware (NYSE: RH) with pure play homebuilders such as Lennar (NYSE: LEN) and Toll Brothers (NYSE: TOLL) among others. Conversely, ITB is more of direct play on dedicated hombeuilders stocks.
Traders looking for a bearish play on homebuilders stocks can consider the Direxion Daily Homebuilders & Supplies 3x Bear Shares (NYSEArca: CLAW), which attempts to deliver triple the daily performance of the index XHB tracks. CLAW debuted last year.
iShares U.S. Home Construction ETF
