The five largest homebuilder stocks have had mixed performances since a month ago, even as the National Association of Home Builders released a strong Housing Market Index last week. The HMI rose 7 points to 70 in December, which barely moved the needle for shares of homebuilders, DR Horton (DHI - Get Report) , KB Home (KBH - Get Report) , Lennar (LEN - Get Report) , Pulte Group (PHM - Get Report) and Toll Brothers (TOL - Get Report) .

When housing starts surged by 25.5% in October it had to have influenced the NAHB HMI survey for December, but then on Friday, housing starts for November plunged by 18.7%. Single-family starts fell to a seasonally-adjusted rate of 828,999 in November down from 869,000 units in October.

Lennar reported better than expected earnings before the opening bell on Monday, but a higher opening price could not be sustained. The stock stayed below its 200-day simple moving average, then closed slightly lower on the session.

Here's the monthly graph of the NAHB HMI vs Single-Family Housing Starts.

 

The NAHB Housing Market Index at 70 in December is shown in blue with the scale on the left of the graph. Single-family starts are shown in red, but the reading on the graph is the 869,000 reading for November. This scale is on the right of the graph.

The NAHB believes that Washington policymakers will provide regulatory relief to help the housing market, but keep in mind that home prices are elevated and that a 30-year fixed-rate mortgage is up more than 100 basis points since the strong October reading for starts.

It seems logical that the potential positives from reduced regulatory roadblocks, from the Trump administration, may face handcuffs of higher interest rates promised by Fed Chair Janet Yellen. It seems like the Trump economic team and the FOMC are far not on the same page when it comes to the U.S. economy. The Trump team theme is "jobs, jobs, jobs, while Yellen thinks that the economy is nearly at full employment.

Here's a scorecard for five major homebuilders followed by their weekly technical charts.

 

DR Horton

 

Courtesy of MetaStock Xenith

The weekly chart is neutral with the stock below its key weekly moving average of $28.45 and above its 200-week simple moving average of $25.74. This "reversion to the mean" provided a buying opportunity at $34.31 during the week of Feb. 12. The weekly momentum reading is projected to rise to 32.56 this week up from 28.90 on Dec. 16.

Investors looking to buy the stock should do so on weakness to $25.48, which is a key level on technical charts until the end of 2016. Investors looking to reduce holdings should consider selling strength to $31.46, which is a key level on technical charts until the end of 2016.

KB Home

Courtesy of MetaStock Xenith

The weekly chart is positive with the stock above its key weekly moving average of $15.94 and is above its 200-week simple moving average of $16.13. This "reversion to the mean" has been a magnet since the week of July 8. The weekly momentum reading is projected to rise to 65.96 this week up from 58.77 on Dec. 16.

Investors looking to buy the stock should consider doing so on weakness to $15.37, which is a key level on technical charts until the end of the year. Investors looking to reduce holdings should consider selling strength to $18.41, which is a key level on technical charts until the end of 2016.

Lennar

Courtesy of MetaStock Xenith

The weekly chart is positive with the stock above its key weekly moving average of $43.22 and is above its 200-week simple moving average of $43.17. This "reversion to the mean" has been a magnet since the week of Sept. 23. The weekly momentum reading is projected to rise to 52.31 this week up from 46.53 on Dec. 16.

Investors looking to buy the stock should consider doing so on weakness to $40.45. which is a key level on technical charts until the end of December. Investors looking to reduce holdings should consider selling strength to $51.52, which is a key level on technical charts until the end of 2016.

Pulte

Courtesy of MetaStock Xenith

The weekly chart is neutral with the stock below its key weekly moving average of $19.00 and below its 200-week simple moving average of $19.35. This "reversion to the mean" has been a magnet since the week of Sept. 23. The weekly momentum reading is projected to rise to 38.97 this week up from 34.46 on Dec. 16.

Investors looking to buy the stock could have down so on weakness to $18.44, which is a key level on technical charts until the end of 2016. Investors looking to reduce holdings should consider selling strength to $20.30, $22.08 and $23.05, which are key levels on technical charts until the end of 2016.

Toll Brothers

 

Courtesy of MetaStock Xenith

The weekly chart is positive with the stock above its key weekly moving average of $30.40 and below its 200-week simple moving average of $33.43. This "reversion to the mean" provided resistance three weeks ago, during the week of Dec. 9. The weekly momentum reading is projected to rise to 66.60 this week up from 61.96 on Dec. 16.

Investors looking to buy the stock should consider doing so on weakness to $28.06, which is a key level on technical charts until the end of December Investors looking to reduce holdings should consider selling strength to $32.67, $34.50 and $35.46, which are key levels on technical charts until the end of 2016.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.