Armstrong World Industries (AWI) , Lennox International (LII) , Masco (MAS) , Owens Corning (OC) and Vulcan Materials (VMC) provide products and materials to all segments of the housing market, including new home construction, home resales and home improvement. Now, investors can count on gains given new plans for spending on infrastructure.
These stocks are components of the PHLX Housing Index, which includes 19 components, of which 11 are homebuilders.
Armstrong makes ceilings and cabinets. Lennox sells air conditioning and heating systems. Masco manufactures home improvement and building products. Owens Corning makes insulation, roofing and siding products. Vulcan Materials makes the ingredients for concrete and cement. New U.S. infrastructure spending should increase business for these companies in 2017.
Here's the scorecard for the housing index and five housing-related stocks.
Here's the daily chart for Armstrong.
Courtesy of MetaStock Xenith
Armstrong closed Thursday at $41, up 3.5% year to date. It is in correction territory, 10.4% below its multiyear intraday high of $45.75, set on Aug. 16. The stock is also in bull market territory, 31.7% above its Feb. 11 low of $31.13.
The daily chart shows the Fibonacci retracements of the rise from the Feb. 11 low to the Aug. 16 high. This stock set its all-time high of $53.64 in February 2014.
Once the stock peaked on Aug. 16, it began to spiral lower. The stock dropped below its 23.6% retracement of $42.29 on Sept. 9, then below its 38.2% retracement of $40.16 on Sept. 23, but held its 200-day simple moving average, then at $39.49. The stock popped back above its 23.6% retracement of $42.29 before plunging to its 50% retracement of $38.43. The stock bounced back to the 38.2% retracement of $40.16 before plunging again to the 61.8% retracement of $36.70 on Nov. 1, which held at the low that day of $36.38. The rebound since then has the stock above its 50% and 38.2% retracements and its 200-day simple moving average of $40.13.
Investors looking to buy Armstrong should buy weakness to $37.02, which is a key level on technical charts until the end of 2016. Investors looking to reduce holdings should sell strength to $41.95, which was nearly tested this week, and remains a key level on technical charts until the end of 2016.