This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Housing-Related Stocks Hold Up Despite Weak Data

NEW YORK (TheStreet) -- The National Association on Home Builders Housing Market Index slumped by a record 10 points to 46 in February back below the neutral reading of 50, partially due to bad weather.

Since the end of January only four of 12 homebuilder stocks in today's post have gains led by Lennar (LEN) up 4.2% followed by Toll Brothers (TOL) up 3.9%. The eight others declined between 1.8% and 4.5% since Jan. 31.

The important component of housing starts is single-family starts which plunged 15.9% in January to an annual rate of 573,000 below the important 600,000 threshold. The December rate was 667,000 and the November level was 727,000 so the trend suggests that the market for single-family homes has stalled at 60% of potential which is the 1,000,000 to 1,200,000 unit range. 

As the above chart shows the Housing Market index stalled just below the 60 threshold with single-family starts is back below the 600,000 threshold.

I have been tracking the weekly chart for the PHLX Housing Sector Index (^HGX) which has 19 components including 11 of the 12 homebuilders I have been profiling. Beazer Homes (BZH) is not in this housing index. The other eight components provide products and services that support the housing market, and all have gains since the end of January.

The two best performers are Owens Corning (OC) and the provider of insulation, roofing, siding, stone and glass has a gain of 17.9% since the end of January. In second place is Vulcan Materials (VMC) and the producer of asphalt mix, concrete and cement has a month-to-date gain of 6.5%.

Courtesy of MetaStock / XENITH

The chart above shows the Fibonacci retracements of the decline in the housing sector index from its mid-2005 high to the March 2009 low. Today the index (207.70) is above the 61.8% retracement level at 202.05 not on the strength of the 11 homebuilders but on the strength of the eight in the housing market in supporting roles.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,614.81 +215.14 1.31%
S&P 500 1,941.28 +37.27 1.96%
NASDAQ 4,419.4780 +103.4040 2.40%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs