Constructive Action in Homebuilding Stocks

Stocks related to the homebuilding sector closed out last week with solid gains in the Friday session. The SPDR S&P Homebuilders Index ETF (XHB) was up 1.5% on the week, as the index attempted to hold important support in the $28.00 area and its 200-day moving average.

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The lumber and lumber products company Weyerhaeuser (WY) was up more than 4% on the week, making a strong close above its 50-day moving average. The weekly chart shows the sharp May/June drop and the subsequent stabilizing price action, which has established a zone of support in the $26.00 area, just above a long-term uptrend line. Technical conditions are also stabilizing, with the relative strength indicator crossing above its centerline and 21-period average and an improving moving-average convergence/divergence histogram....209 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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