Over the past several, homebuilders stocks and the related exchange traded funds have been surging. That theme has spelled good news for the Direxion Daily Homebuilders & Supplies 3x Bull Shares (NYSEArca: NAIL), the only triple-leveraged homebuilders ETF.
NAIL tries to deliver triple the daily returns of the Dow Jones U.S. Select Home Construction Index. That index “measures U.S companies in the home construction sector that provide a wide range of products and services related to homebuilding, including home construction and producers, sellers and suppliers of building materials, furnishings and fixtures and also home improvement retailers,” according to Direxion.
The SPDR S&P Homebuilders ETF (NYSEArca: XHB) and the iShares U.S. Home Construction ETF (NYSEArca: ITB), the two benchmark homebuilders exchange traded funds, have recently been building impressive gains.
The PHLX Housing Sector Index (HGX) has finally found its way back to its 2005 highs, which could prove meaningful for ITB and XHB although neither ETF tracks that index. XHB follows the S&P Homebuilders Select Industry Index while ITB tracks the Dow Jones U.S. Select Home Construction Index.
“The sector is rallying off strong fundamental data. Five of the indexes’ top six holdings have reported earnings for the September quarter-end, and all of them—Lennar, NVR, PulteGroup, Home Depot, and D.R. Horton—had earnings per share that either met or exceeded Wall Street expectations,” according to Direxion research.