David Rosenberg wrote an article and produced the chart below, making the case that Homebuilder stocks look more overvalued now than they did at the housing bubble peak (see article here)
CLICK ON CHART TO ENLARGE
I will leave the valuation part to David and other experts. Joe Friday points out below that the DJ Home Construction Index and REITS (IYR) are nearing resistance lines that investors might want to respect.
CLICK ON CHART TO ENLARGE
Last year Banks and Real Estate were a positive influence on the broad market, helping to pull it higher. The Banking index is up against key resistance levels as well right now. (see post here)
Momentum is on the side of Real Estate and Banks right now. Breakouts would be a positive for sure. The Power of the Pattern would suggest to “Respect Resistance” and follow a breakout should it take place.
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