5. Homebuilder's Double Bottom: Real or Fantasy?Alan Farley
4/3/2009 7:57 AM EDT The SPDR S&P Homebuilders ETF ( XHB) has been moving higher with the broad market since the March turnaround. The bounce started right at the November low, raising speculation that the fund (and sector) is grinding out a double bottom pattern. But is this pattern real or fantasy? Current technical evidence is mixed at best. For starters, the fund still hasn't posted a single higher low during this recovery effort, despite the 40% bounce. And accumulation is just pathetic, with on-balance volume hardly budging in the last four weeks. On the flip side, Thursday's rally was the first time the fund actually bounced at the 50-day EMA since last September. This positive price action confirms new support at that level. And it will take less than a single point of progress to finally end the four-month string of lower lows. For free trial to Real Money, where you can get updated trading and investment ideas throughout the course of the day, please click on the tile below.