Many of the leading home-builder stocks are coming under some early morning selling pressure. Earlier today, the National Association of Realtors said home sales fell 1.2 percent to an annual rate of 5.08 million units. This news seems to be having a slightly negative effect on the leading home-builder stocks such as Toll Brothers Inc (TOL), M/I Homes Inc (MHO), Lennar Corporation (LEN), and the Ryland Group, Inc. (RYL).
Traders that want to track the home-builder sector can follow the iShares Dow Jones US Home Construction ETF (ITB). Today, ITB is trading lower by 0.36 cents to $22.87 a share. Day traders can watch for intra-day support around the $22.50 level. That level will be a good scalp trading entry point.
Traders should follow the home-builder sector very closely as it is such an important part of the U.S. economy. A fair case can be made that the home-builder stocks are a leading indicator for the economic recovery and stock market. Currently, the leading home-builder stocks have been in a trading range since the start of the year. The key daily chart support level for the ITB is around the $20.00 level. Any significant break below that important support area could spell serious problems for the home-builder sector and the U.S. economy. Watch these levels, read the charts, they will tell where the market is headed well before the vast majority recognizes it