Skip to main content

This column was originally published on RealMoney on March 14 at 3:28 p.m. EST. It's being republished as a bonus for readers.

How important is this rally in the homebuilders? Can they keep moving up? Are they coiled springs?

Frankly, I don't know. They got to trading at 5-6 times earnings. They can now go up to 8 times earnings, but I don't believe that can happen unless the


tips its hand.

To me, it is a rally to sell, but not Wednesday; make it Thursday. If you are a homebuilding analyst, you have to be thinking, is it all clear? Someone might want to go positive tomorrow off the

DR Horton


action and pull the trigger, and you get day two of the rally. When you put that in the context of what may be an explosive week, then you end up with something more than a one-day trade.

If you believe there is more than a one-day trade here, here are some stocks worth considering:


Countrywide Financial


: Didn't rally as much as the other financials off the

North Fork


Scroll to Continue

TheStreet Recommends

deal but should have, given the breadth of product. I believe it didn't because of all of the publicity about the slowdown in home equity loans, but that's why the stock trades at 8 times earnings and not 10 times earnings.


Accredited Home Lenders Holding


: Looks to me like it could challenge its old high. Here's a stock that sells at a price-to-earnings ratio that is literally half its growth rate with a terrific stock that has handled the higher rates magnificently. Shouldn't that stock be more than $50?


St. Joe


: Here's a homebuilder that has been clocked, beaten beyond all recognition. It is the classic "second-day" homebuilder, in that it goes up the day after the other homebuilders rally. I would pull the trigger to buy some now.

P.S. from Editor-in-Chief, Dave Morrow:

It's always been my opinion that it pays to have more -- not fewer -- expert market views and analyses when you're making investing or trading decisions. That's why I recommend you take advantage of our

free trial offer



premium Web site, where you'll get in-depth commentary


money-making strategies from over 50 Wall Street pros, including Jim Cramer. Take my advice --

try it now.

At the time of publication, Cramer had no positions in the stocks mentioned.

Jim Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

Action Alerts PLUS. Listen to Cramer's RealMoney Radio show on your computer; just click

here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click

here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click

here to get his second book, "You Got Screwed!" and click

here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by

clicking here. has a revenue-sharing relationship with Traders' Library under which it receives a portion of the revenue from Traders' Library purchases by customers directed there from