XHB homebuilders

D

dividend

Homebuilders don't look too bad to me. New home inventories aren't extraordinarily high. What is troublesome is that existing home inventories are high and continue to rise, and... consumer sentiment is very low.

However, I don't think that new homes have a big problem attracting new buyers. Given a choice between a new home and a used home for similiar prices and similar location, I think that the new home will get sold first.

Homebuilders of course will have lower earnings due to rising materials cost and lower sales dollar volume, but I think that the market is too aggressive in its discounting of these fundamentals.

Homes are not being sold now because they are not priced correctly. Sellers still refusing to price it where it should be. I think that homebuilders will continue to discount prices of new homes while sellers of existing homes will try to be stubborn. New entrylevel homes will do ok while existing home inventories will grow.
 
hmmmmmmm I wouldn't touch that stock (XHB) with a 10 ft. pole. A downtrend is a downtrend. Use calls if you want to play for upside because that basically defines your max loss.

Good luck.
 
Im very bearish on homebuilders however a rally of 5-10% I believe is in XHB very soon. I think 20+ is in the cards over the next 4-6 weeks.


Beside that the trend is down, but when they do come to a bottom sometime over the next few years this ETF could rally 50%+ in a year. Maybe even more.
 
There is a good expected return for the HB trade but it is highly risky. There are many risks, including if the FRB doesn't cut Fed Fund rate enough in Dec. There is also a huge risk of the yen spiking up suddenly. That could bitchslap the market and send some homebuilders to $5. Maybe it's a good idea to be long/short hedged and protect yourself from something stupid happening like a systemic quant fund blowing up.
 
I have looked at xhb and considered starting to scale trade it on deep swings into new lows until I realized that bankruptcy of one or several members is a real possibility, so I pass on this for now.

GC
 
Quote from makloda:

hmmmmmmm I wouldn't touch that stock (XHB) with a 10 ft. pole. A downtrend is a downtrend. Use calls if you want to play for upside because that basically defines your max loss.

Good luck.
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Same here, no support, no proof of a turnaround on daily chart.
You are catching a falling knife.
This doesn't mean you won't get a dead cat bounce, but my trading style dictates that you must have support bounce or a trendline break to enter long in a downtrend.
10,000 stocks out there, better opportunities.

Good luck with the trade
 
Same Citi analyst that upgraded H Builders last month now downgraded them. The comedy continues...... Now we know why brokers make money. Go figure.

CTX 19.14 11/26/2007
BZH 8.12 11/26/2007
KBH 20.77 11/26/2007
DHI 11.02 11/26/2007
MHO 11.78 11/26/2007
HOV 6.95 11/26/2007
MTH 13.84 11/26/2007
XHB 17.9 11/26/2007


Quote from dividend:

Citi upgrade H. Builders to "BUY"...

quick quote

symbol/price/date/book
CTX 27.47 10/1/2007 9:59am CTX $26 9/10/2007 $39
BZH 8.33 10/1/2007 9:59am BZH $9.45 9/10/2007 $37
KBH 25.43 10/1/2007 9:59am KBH $26.25 9/10/2007 $31
DHI 13.13 10/1/2007 9:59am DHI $13.69 9/10/2007 $18
MHO 14.04 10/1/2007 9:59am MHO $14.90 9/10/2007 $41
HOV 11.53 10/1/2007 9:59am HOV $9.99 9/10/2007 $27
MTH 14.1 10/1/2007 9:59am MTH $15.95 9/10/2007 $36
More...
 
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