{"id":189796,"date":"2023-05-03T14:30:49","date_gmt":"2023-05-03T18:30:49","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=189796"},"modified":"2024-01-24T12:13:50","modified_gmt":"2024-01-24T17:13:50","slug":"chart-advisor-homebuilders-build-to-new-heights","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-homebuilders-build-to-new-heights\/","title":{"rendered":"Chart Advisor: Homebuilders Build to New Heights"},"content":{"rendered":"\n<p><strong><a href=\"https:\/\/www.investopedia.com\/contributors\/54841\/?utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=27774019&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>By&nbsp;<\/strong><\/a><strong><a href=\"https:\/\/www.investopedia.com\/contributors\/54841\/?utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=27774019&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>J.C. Parets<\/strong><\/a>&nbsp;&amp;&nbsp;<a href=\"https:\/\/get.allstarcharts.com\/?utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=27774019&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>All Star Charts<\/strong><\/a><\/strong><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-monday-1st-may-2023\">Monday, 1st May, 2023<\/h2>\n\n\n\n<p><strong>1\/ Homebuilders Build to New Heights<\/strong><\/p>\n\n\n\n<p><strong>2\/ Nasdaq Reaches New Highs<\/strong><\/p>\n\n\n\n<p><strong>3\/ Silver Marks the Spot<\/strong><\/p>\n\n\n\n<p><strong>4\/ Demand Cools for Coking Coal<\/strong><\/p>\n\n\n\n<p><em>Investopedia is partnering with All Star Charts on this newsletter, which both sells its research to investors, and may trade or hold positions in securities mentioned herein. The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-1-homebuilders-build-to-new-heights\">1\/ <strong>Homebuilders Build to New Heights<\/strong><\/h2>\n\n\n\n<p>D.R. Horton (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=DHI&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9016011-20230501&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=050123\" target=\"_blank\" rel=\"noreferrer noopener\">DHI<\/a>), the world\u2019s largest home construction company, is positioning for a&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/b\/breakout.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9016011-20230501&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=050123\" target=\"_blank\" rel=\"noreferrer noopener\">breakout<\/a>&nbsp;to new all-time highs. Like banks or industrial stocks, the performance of homebuilders is a reliable&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/b\/bellwether.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9016011-20230501&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=050123\" target=\"_blank\" rel=\"noreferrer noopener\">bellwether<\/a>&nbsp;for the broader market and economy. And it&#8217;s not just D.R. Horton, as the entire industry group is exhibiting strength right now.<\/p>\n\n\n\n<p>Here\u2019s a look at a daily&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/c\/candlestick.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9016011-20230501&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=050123\" target=\"_blank\" rel=\"noreferrer noopener\">candlestick chart<\/a>&nbsp;of DHI, along with a relative price chart of DHI versus the S&amp;P 500 in the lower pane:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/05\/1-1-1100x537.png\" alt=\"\" class=\"wp-image-189797 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/537;\" \/><figcaption class=\"wp-element-caption\"><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>As you can see, an upside resolution has not yet occurred on absolute terms, but it could be imminent. One of the best&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/l\/leadingindicator.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9016011-20230501&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=050123\" target=\"_blank\" rel=\"noreferrer noopener\">leading indicators<\/a>&nbsp;for price is the relative trend. Seeing D.R. Horton make new highs relative to the broader market is a strong signal that price could soon follow on absolute terms.<\/p>\n\n\n\n<p>If and when that happens, it would be a bullish development for risk appetite and the equity market.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-nasdaq-reaches-new-highs\">2\/ <strong>Nasdaq Reaches New Highs<\/strong><\/h2>\n\n\n\n<p>We&#8217;ve been emphasizing how&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/g\/growthstock.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9016011-20230501&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=050123\" target=\"_blank\" rel=\"noreferrer noopener\">growth stocks<\/a>&nbsp;have led the way higher on both absolute and relative terms this year. With the largest growth stocks in the market leading the march higher, it should be no surprise to see this strength appear at the index level.<\/p>\n\n\n\n<p>The chart below shows the&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/n\/nasdaq100.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9016011-20230501&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=050123\" target=\"_blank\" rel=\"noreferrer noopener\">Nasdaq 100<\/a>&nbsp;ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=QQQ&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9016011-20230501&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=050123\" target=\"_blank\" rel=\"noreferrer noopener\">QQQ<\/a>) reaching fresh eight-month highs:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/05\/2-1-1100x702.png\" alt=\"\" class=\"wp-image-189798 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/702;\" \/><figcaption class=\"wp-element-caption\"><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>Buyers successfully defended the lows several times into the end of last year before price rebounded off the 61.8%&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/f\/fibonacciretracement.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9016011-20230501&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=050123\" target=\"_blank\" rel=\"noreferrer noopener\">Fibonacci retracement<\/a>. After a series of legs higher this year, price has been coiling in a bullish&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/f\/flag.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9016011-20230501&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=050123\" target=\"_blank\" rel=\"noreferrer noopener\">flag pattern<\/a>&nbsp;over the past month. It seems to be resolving higher now as the index is trading at its highest level since August.<\/p>\n\n\n\n<p>The fact that this heavyweight tech index is making new highs could support further outperformance from growth areas of the market.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-silver-marks-the-spot\">3\/ <strong>Silver Marks the Spot<\/strong><\/h2>\n\n\n\n<p>It\u2019s still an uncertain market. Signs of strength are fleeting, whether we\u2019re looking at stocks or&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/p\/preciousmetal.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9016011-20230501&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=050123\" target=\"_blank\" rel=\"noreferrer noopener\">precious metals<\/a>.<\/p>\n\n\n\n<p>Despite failed breakouts and&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/t\/tradingrange.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9016011-20230501&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=050123\" target=\"_blank\" rel=\"noreferrer noopener\">trading ranges<\/a>&nbsp;dominating the market environment, one bullish data point has stood out over the past few weeks regarding precious metals: silver.<\/p>\n\n\n\n<p>Here is a chart of silver futures finding&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/z\/zone-of-support.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9016011-20230501&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=050123\" target=\"_blank\" rel=\"noreferrer noopener\">support<\/a>&nbsp;at a critical polarity zone:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/05\/3-1-1100x561.png\" alt=\"\" class=\"wp-image-189799 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/561;\" \/><figcaption class=\"wp-element-caption\"><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>The $24.75 level acted as support last spring before giving way to increased selling pressure. By the end of last year and heading into early 2023, the same price level turned into&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/resistance.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9016011-20230501&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=050123\" target=\"_blank\" rel=\"noreferrer noopener\">resistance<\/a>.<\/p>\n\n\n\n<p>This is the principle of polarity in action, as the forces of supply and demand highlight the importance of this level.<\/p>\n\n\n\n<p>As long as silver futures hold above this level, it could be constructive for prices.&nbsp;On the other hand, if price undercuts its January highs, near-term risks could turn to the downside.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-demand-cools-for-coking-coal\">4\/ <strong>Demand Cools for Coking Coal<\/strong><\/h2>\n\n\n\n<p><a href=\"https:\/\/www.investopedia.com\/terms\/c\/cyclicalstock.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9016011-20230501&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=050123\" target=\"_blank\" rel=\"noreferrer noopener\">Cyclical<\/a>&nbsp;commodities are under pressure.&nbsp;<\/p>\n\n\n\n<p>A prime example is crude oil and copper futures trading below their respective risk levels, but last month\u2019s candle in coking coal futures also captures the selling pressure.<\/p>\n\n\n\n<p>The chart below shows a large-bodied candle in coking coal futures:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/05\/4-2-1100x561.png\" alt=\"\" class=\"wp-image-189800 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/561;\" \/><figcaption class=\"wp-element-caption\"><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>Sellers took control of the market at the beginning of last month and drove prices lower through last Friday\u2019s close, sending them below their prior highs from 2016.<\/p>\n\n\n\n<p>Risks are now to the downside for coking coal. Similar weakness could spill over to industrial and&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/b\/base-metals.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9016011-20230501&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=050123\" target=\"_blank\" rel=\"noreferrer noopener\">base metals<\/a>, especially rebar, steel, and iron ore futures.&nbsp;<\/p>\n\n\n\n<p>Decisive downside momentum in coking coal futures would not support a rebound in economic growth or an environment supporting higher commodity prices.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally posted 1st May 2023<\/p>\n","protected":false},"excerpt":{"rendered":"<p>D.R. Horton (DHI), the world\u2019s largest home construction company, is positioning for a breakout to new all-time highs. Like banks or industrial stocks, the performance of homebuilders is a reliable bellwether for the broader market and economy. <\/p>\n","protected":false},"author":186,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21,14,17,18,6,8,9,22,23,26,3],"tags":[5831,2782],"contributors-categories":[13686],"class_list":{"0":"post-189796","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-commodities","7":"category-etfs","8":"category-futures","9":"category-macro","10":"category-north-america","11":"category-region","12":"category-securities","13":"category-stocks","14":"category-technical-analysis","15":"category-text-articles","16":"category-traders-insight","17":"tag-dhi","18":"tag-qqq","19":"contributors-categories-investopedia"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Chart Advisor: Homebuilders Build to New Heights<\/title>\n<meta name=\"description\" content=\"D.R. Horton (DHI), the world\u2019s largest home construction company, is positioning for a breakout to new all-time highs. Like banks or industrial...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.interactivebrokers.com\/campus\/wp-json\/wp\/v2\/posts\/189796\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chart Advisor: Homebuilders Build to New Heights | IBKR Campus US\" \/>\n<meta property=\"og:description\" content=\"D.R. Horton (DHI), the world\u2019s largest home construction company, is positioning for a breakout to new all-time highs. 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