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Shared this chart with Premium and Sector Sentiment Members last week.
The 2-pack reflects that the DJ Home construction index is up against a couple of resistance lines, a Fibonacci extension level at (1) and the relative momentum index is hitting its highest reading since the Real Estate bubble peak back in 2005.
IYR has rallied up to its 61% Fib level at the top of a bearish rising wedge at (2).
The Home construction index has been white hot, out gaining the S&P 500 by 60% over the past year. I have no idea what might cool off this key sector or if it will….these above resistance points could be a place though, where this sector at least takes a break.
If aggressive, this situation presents a price point that one could short this sector with a stop just above these resistance points.