That strong fundamental backdrop is translating into technicals today with the iShares U.S. Home Construction establishing a new record closing high. (The first since February.)
This may not present a lot of opportunities in the near term. However it could be a recurring theme as 2020 progresses. Buyers could gobble up key names on relatively modest pullbacks, not wanting to miss such an obvious trend. Just look at NVR (#3 holding in ITB ) after its quarterly report on July 24. and revenue missed, but it still jumped 11 percent. That may suggest buyers are prowling in the sector.
ITB has also shown a tendency to move calendar year by calendar year. 2017 was straight up, 2018 was straight down and 2019 was straight up again. It tried to keep the trajectory early this year, only to plunge on coronavirus. But now it’s back to positive and hitting new highs, more investors could start to pay attention into the fall and winter.
Finally, there could be catalysts on Wednesday. Pending home sales are due in the morning, and the is expected to reinforce its mantra of low interest rates in the afternoon.