Taking a Look at Homebuilders

Hey 5-Star Trader,

With every trade comes risk, but as you know, some are much riskier than others. Now that the market is currently trading sideways, some traders are at a loss of where their next move should be. My suggestion is to keep your eye on Homebuilders.

The homebuilder’s sector has been on fire but for some reason, it often flies under the radar. Speaking from personal experience, my sister, brother, and I all bought houses last year and the market for homes has only continued to get hotter! There has been an explosion of demand from the work-from-homers and there simply not enough houses on the market to keep up. The fundamentals and technicals support the trades, plus a pullback could make for solid entry.

Which names do I like?

Right now, a few names I’m watching include XHB, DHI, TOL, and KBH.

Due to the nature of the market right now, these names are probably best played if held for a bit, but I am spying a great opportunity here and especially if you are able to take advantage of a market pullback!

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