Watch any homebuilder stock for the month of January. They have all rallied atleast 50%. Right now all the money flow has been going to these names.
The homebuilder index XHB ETF by itself has completed a 50% move. It has also broken an important downtrend line. Check chart of Hovnanian homes- HOV. This stock has rallied a massive 106%. Other residential home stocks like CHCI, MHO, PHM have rallied more than 70%.
These rallies have been fueled by the FED emergency cut of 0.75 and last week's additional cut of another 0.50.
Honestly, I completely missed these rallies. But no worries, remember there are always retracements to Fibonacci levels. I will be closely watching to see if this move can be sustained or if it was just a one-month wonder and short covering rally.
In stark contrast, check the cover of Business Week. It talks about further meltdown in the Housing market ;)
Sunday, February 3, 2008
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