We have been noticing a steady recovery in the homebuilding stocks since last fall, as some of the indices that track them appeared to be putting in head and shoulder reversal patterns.
Here is an example using the Philadelphia Housing Index from last fall.
These patterns can be very reliable in identifying turning points in markets, sectors, stocks and so on.
Now lets move to what is happening today and for this chart we will use a weekly chart ( just means each vertical bar represents one week instead of one day ).
There are two bullish developments here. First a trend line dating back to the 2007 highs has been broken to the upside. Second the highs from last spring, early summer have been surpassed.
Both of these should be very bullish developments for companies involved in the real estate building sector.
Lets stay tuned with this group!