Connect with us

Hi, what are you looking for?

Trading Secrets

NOW Is The Time To Add This Industry Group To Your Portfolio

As the winter season approaches, I’m going to suggest that you consider buying into what might seem to be a warm weather industry – home construction ($DJUSHB). The “go away in May” theory applies very strongly to this cyclical group. Over the past 20 years, the average 6-month return in this industry can be broken down as follows:

May through October: +0.3%November through April: +12.5%

Does it make any sense? Not at first, because the most popular time to begin building a house is the spring time. It avoids many winter-related delays. But I’m not talking about the best time to build a new home. Instead, when’s the best time to buy stocks within homebuilders? Based on the above seasonality chart, that time is November, or RIGHT NOW. While interest rates have been soaring in 2022, the DJUSHB has quietly been improving technically, threatening a key price breakout, while trending up for months relative to the benchmark S&P 500. Check this out:

I called a market top at the end of December and felt we’d see 6-9 months of a cyclical bear market, followed by a massive rally to set new all-time highs. I believe we’re now on our way as the Fed pivots away from its hawkish stance.

On Thursday, I’ll be featuring the best home construction stock to own right now, in my opinion. It’s showing EXCELLENT relative strength vs. its home construction peers and it’s averaged gaining 13.4% in the November to January period over the past 20 years. As rates drop, I see this one EXPLODING higher! If you’re not already an EB Digest subscriber, CLICK HERE to start your subscription and receive this stock tomorrow morning. Remember, subscription is FREE and you may unsubscribe at any time.

Happy trading!

Tom

Enter your email address below and we’ll send you our best practices.

    You can unsubscribe at any time. Redstatefoundation respects your privacy and strives to be transparent about our data collection practices. Please read our Privacy Policy and Terms of Use.

    You May Also Like

    Trading Life

    Laura Wong Hon Chan is an interest rate options trader, who is currently a director at Bank of America Merrill Lynch in New York....

    Trading Secrets

    In this episode of StockCharts TV‘s The MEM Edge, Mary Ellen reviews what’s driving the markets higher and what to be on the lookout...

    Trading Secrets

    SPX Monitoring Purposes: Long SPX on 10/10/22 at 3612.39; sold 12/13/22 at 3669.91 = gain 1.59%. Monitoring Purposes GOLD: Long GDX on 10/9/20 at...

    Trading Secrets

    I don’t like it when parts of a puzzle don’t match. You just don’t get a clear picture. As participants in the markets, we...