Don't Ignore This Chart!

Home Construction Stocks Hitting Fresh Highs; DHI Leads

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The stock market looks ahead and based on the latest breakout in home construction stocks ($DJUSHB), apparently traders like what they see on the horizon.  The 10 year treasury yield ($TNX) held key support and is bouncing.  Proceeds from the sale of treasuries seems to be finding a "home" in the DJUSHB.  We spent more than a year consolidating in a bullish ascending triangle pattern, then broke out with a measurement to 710.  Today's breakout above 600 will likely provide the impetus for another leg higher in the DJUSHB.  Also reflected on the chart below is bounce off support in the TNX and the recent breakout in DR Horton (DHI).  DHI recently reported better than expected revenue and earnings and action the past two days certainly improves its technical standing as well.  Check out this chart:

Happy trading!

Tom

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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