The Dow Jones U.S. Heavy Construction Index ($DJUSHV) is currently testing its rising 20 week EMA and is near key support in its four month sideways consolidation range from 440-480. Friday's close was 447 and the weekly RSI is now at 43, typically a solid level on the RSI where we see price reversals occur. If the DJUSHV does, in fact, begin to recover and head back towards 480, one stock poised to recover could be Granite Construction (GVA), which is currently testing major support. Take a look:
While there's no guarantee of a rebound in the DJUSHV or in GVA shares, there are reasons why we could see a reversal in both in the near-term and the reward to risk in trading GVA would seem to be solid at the current time and price.
Happy trading!
Tom
