NEW YORK ( TheStreet) -- The volatile price performances of the homebuilder stocks in 2013 have provided trading opportunities as an important segment of our economy attempts to return to leadership.
On Sept. 9 I wrote,
Housing Bubble Is Re-inflating and included the fact that at the May 20 high for the
PHLX Housing Sector Index
Chart Courtesy of Thomson/ReutersThe daily chart for the housing index shows declining momentum with the index trading around its 200-day SMA at 183.83 with the 21-day and 50-day SMAs as supports at 176.13 and 176.00. The index is between my semiannual and quarterly pivots at 180.52 and 185.61. When the housing index was at its May 20 high most of the homebuilders had triple-digit gains over the last 12 months. Today only three have double-digit gains and five now show losses over the last 12 months. In my Sept. 9 post I also showed that seven of 11 had hold ratings with two having sell ratings and two having strong sell ratings. All were trading below their 200-day SMAs. In addition, there was some upside potential given housing data suggesting a re-inflating bubble. Back at the May highs all were well above their 200-day SMAs, which indicated risk of reversion to the mean for all 11.