Wednesday, April 11, 2007

A Look At Homebuilders

Here is a chart of the homebuilders ETF. Notice the following:

1.) The chart is clearly in a downtrend.

2.) Prices are consolidating around a technical level established 10 months ago.

3.) Prices are trading below all the simple moving averages.

4.) the 10, 20 and 50 day SMA are all heading lower.

The above 4 factors are all bearish. The only positive element on this chart is the decreased volume over the last 5 or so trading days. That indicates the big selling might be over and the average will limp along for awhile.

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