iShares Dow Jones US Home Const. (ETF) (NYSEARCA:ITB) — This ETF tracks the investment results of the Dow Jones U.S. Select Home Construction Index with at least 90% of its assets invested in the stocks of the underlying index.
The top 10 holdings are D.R. Horton, Inc. (NYSE:DHI), Lennar Corporation (NYSE:LEN), PulteGroup, Inc. (NYSE:PHM), Toll Brothers Inc (NYSE:TOL), NVR, Inc. (NYSE:NVR), Home Depot Inc (NYSE:HD
), Lowe’s Companies, Inc. (NYSE:LOW), Tri Pointe Homes Inc (NYSE:TPH), Ryland Group Inc (NYSE:RYL) and Meritage Homes Corp (NYSE:MTH).
ITB has outperformed the market, gaining 20% in the past six months compared with 6% for the S&P 500.
As noted in today’s Daily ÃÛÌÒ´«Ã½ Outlook, the existing home sales report for February will be released today. It is anticipated that sales have suffered due to the rough winter, which had a dramatic impact on both existing and new home sales. However, with the improvement in weather conditions, pent-up demand could exist, which would have a positive impact on ITB.
Technically, ITB has been trading in a well-defined bull channel since the October low at under $22. The bull channel received a push when the 50-day moving average crossed up through the 200-day moving average in a golden cross in early December.
Support is initially at the 20-day moving average at $27.29, then the 50-day moving average at $26.59, and finally, at its bullish support line at about $25.50. My six-month trading target for ITB is $32, which is 15% above current prices; however investors may hold shares for a much higher long-term target.
