The weekly chart shows that this sector rallied form its lows in the third quarter of 2011 to a high earlier this year. Prices have moved slightly lower since April, but this can be analyzed as a consolidation as much as a contraction. Prices used the 10, 20 and 50 week EMAs for technical support. Currently, prices are at/near multi-year highs.
In addition, the weekly charts of a large number of the stocks within the industry are incredibly strong. All of the charts below are at or near multi-year highs. All are above 200 the EMAs, with the shorter EMAs rising and bullishly aligned. Prices are strong and money is flowing into the markets.
This is not to say that all stocks in this area are doing well; they're not.
While Hovnanian has rallied over the last few months, prices are still nowhere near multi-year highs. But -- also note the price -- $2.94. This company is not in good financial shape period.
Comstock homebuilding is also trading in the same range its been trading in for the last two years. However -- note that this is a very cheap stock (less than $2.00/share), indicating the company is teetering on the financial brink.