(This is an excerpt from an article I originally published on Seeking Alpha on May 31, 2012. Click here to read the entire piece.)
The SPDR S&P Homebuilders ETF (XHB) has remained amazingly resilient during the stock market’s latest rendition of the “sell-in-May” swoon. {snip}
Source: FreeStockCharts.com
I believe this trading action is consistent with my on-going thesis that the housing industry as a whole will finally reach a bottom in 2013. Unfortunately, instead of keeping things simple and buying this index, I decided to go for what I determined was an undervalued stock in Kb Home (KBH). {snip}
Source: Stockcharts.com
I still think this is now a great spot to start building a position in KBH, but going forward I will be buying the dips in XHB, not KBH.
Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on May 31, 2012. Click here to read the entire piece.)
Full disclosure: long KBH