Shares of homebuilders, D R Horton (DHI - Get Report) , KB Home (KBH - Get Report) , Lennar (LEN - Get Report) , Pulte Group (PHM - Get Report) and Toll Brothers (TOL - Get Report) have solid gains year to date, and two are in bull market territory up 20% or more since post-election lows. The rise is in anticipation of a speedy repeal of Dodd-Frank provisions that have dragged the housing market for the past eight years. Waiting legislation could cause a housing pause, and a technical correction for these stocks could follow.

The National Association of Home Builders Housing Market Index slipped two points in February to 65, after peaking at 70 in December. Single-family housing starts, the key metric for homebuilders, rose to a seasonally adjusted annual rate of 823,000 in January, up from 795,000 in December.

Homebuilders remain optimistic but reference the regulatory burdens that challenge the industry. Homebuilders are seeing reduced buyer traffic as consumers wait for an ease in regulations.

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

 

The NAHB HMI at 65 in February is shown in blue with the left side of the graph. Single-family starts is scaled on the right is shown in red and is the 795,000 reading for December.

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

Here's the weekly chart for D R Horton.

 

Courtesy of MetaStock Xenith

The weekly chart is positive with the stock above its key weekly moving average of $29.86, and above its 200-week simple moving average of $25.98. The weekly momentum reading is projected to rise to 66.97 this week, up from 62.36 on Feb. 17. The horizontal lines are Fibonacci Retracements of the crash from its July 2005 high to the November 2008 low. The 61.8% retracement of $27.88 has been a magnet since April 2015.

Buy the stock on weakness to $25.98, the 200-week simple moving average. Reduce holdings on strength to semiannual and annual risky levels of $33.33 and $35.05, respectively.

Here's the weekly chart for KB Home.

Courtesy of MetaStock Xenith

The weekly chart is positive with the stock above its key weekly moving average of $16.48 and above its 200-week simple moving average of $15.92. The weekly momentum reading is projected to rise to 68.11 this week, up from 66.21 on Feb. 17. The horizontal lines are Fibonacci Retracements of the crash from its July 2005 high to the September 2011 low. This homebuilder has been the laggard as its 23.6% retracement of $23.90 has been a magnet since May 2013.

Buy the stock on weakness to $14.93, which is my annual value level. Reduce holdings on strength to $17.29, which is my semiannual risky level.

Here's the weekly chart for Lennar.

Courtesy of MetaStock Xenith

The weekly chart is positive with the stock above its key weekly moving average of $45.52 and above its 200-week simple moving average of $43.37. The weekly momentum reading is projected to rise to 75.54 this week, up from 70.56 on Feb. 17. The horizontal lines are Fibonacci Retracements of the crash from its July 2005 high to the November 2008 low. The 61.8% retracement of $43.83 has been a magnet since May 2013.

Buy the stock on weakness to $43.10, which is my monthly risky level. Reduce holdings on strength to $48.95, which is my semiannual risky level.

Here's the weekly chart for Pulte.

Courtesy of MetaStock Xenith

The weekly chart is positive with the stock above its key weekly moving average of $20.65 and above its 200-week simple moving average of $19.37. The weekly momentum reading is projected to rise to 78.75 this week, up from 73.48 on Feb. 17. The horizontal lines are Fibonacci Retracements of the crash from its July 2005 high to the October 2011 low. The 38.2% retracement of $20.45 has been a magnet since January 2013.

Buy the stock on weakness to $17.22, which is my quarterly risky level. Reduce holdings on strength to this week's risky level of $22.11.

Here's the weekly chart for Toll Brothers.

 

Courtesy of MetaStock Xenith

The weekly chart is positive with the stock above its key weekly moving average of $31.88 and above its 200-week simple moving average of $33.33. The weekly momentum reading is projected to end the week at 66.01, up from 65.03 on Feb. 17. The horizontal lines are Fibonacci Retracements of the crash from its July 2005 high to the October 2011. The stock is between its 38.2% retracement of $30.51 and its 50% retracement of $35.89.

Buy the stock on weakness to $30.11, which is my monthly risky level. Reduce holdings on strength to $34.60, which is my semiannual risky level.

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