No Bubble Found in Housing's Charts
Editor's Note: This is a bonus story from Gary B. Smith, whose commentary usually appears only on
RealMoney
. We're offering it today to
TheStreet.com
readers. The story published on RealMoney at 8:30 a.m. on March 7. To read Smith's commentary regularly, please click here for information about a free trial to
RealMoney.
The "it's a bubble" talk has been heating up with each passing day that housing prices don't crash.
Let's discount half that talk, because it comes from that great camp of folks who absolutely abhor good times.
But we'll assume the other half doesn't have any stake in the outcome other than the need to be right. The question, then, is whether they are right.
Of course, I don't know the answer, but I do know the charts of housing stocks certainly don't reflect an overbought condition.
Instead, they present some moderate strength, or in the case of
NVR
(NVR) - Get Report
below, some solid basing action, which is normally a prelude before a new leg up.
Naturally I'd like to see that break out before I bought, but in any event, I don't see the same parabolic moves I saw in the
Nasdaq
during its heyday.
Today, the
Nasdaq
,
Research In Motion
( RIMM),
Nautilus Group
(NLS) - Get Report
,
Emcore
(EMKR) - Get Report
,
Silicon Graphics
(SGI)
and
RehabCare Group
( RHB).
And that is the final word from Potomac, Maryland, where many people want to equate the housing "bubble" with the Nasdaq bubble. The one big difference I see, though, is that a lot of folks with inflated home prices won't be selling regardless of what happens.
As I've told my kids, they'd better start fighting now over who gets the house, because after all the time and energy my wife and I have put into it, we're sure never moving!
Charts produced by TC2000, which is a registered trademark of
Worden Brothers Inc.
Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks.
Smith writes a daily technical analysis column for RealMoney.com and also produces a daily premium product for TheStreet.com called The Chartman's Top Stocks --
click here for a free two-week trial. While Gary cannot provide investment advice or recommendations, he invites you to send your feedback to
gsmith@thestreet.com.