Homebuilders have pulled back following a big rally. Now the chart could be lining up for another move to the upside.
The Philadelphia Housing Index has been finding support at its 100-day simple moving average for the last two weeks. It’s also been holding a price zone around 460. That’s potentially significant because it was a peak on March 17 and then a consolidation zone March 26-30, before prices broke out to new highs.
Those are longer-term patterns. Two other signals have appeared in the shorter time frame.
First, HGX is pushing above its 21-day exponential moving average (EMA) today – something it hasn’t done in a month. The 8-day EMA is also nearing a cross above the 21-day EMA, which will trigger alerts for some trend followers.
Second, MACD is rising again after a month in the red.
Finally, the weekly chart shows an inside candle last week. That also suggests the shorter-term downtrend has ended and prices are ready to resume their longer-term uptrend.
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