Homebuilder Sector Stands On Firm Ground, Airline Stocks Bullish

iShares DJ US Home Construction Fund (ITB: 13.12 +0.07 +0.54%)

As mentioned in the previous posting, the homebuilding sector seems to have turned around with DR Horton (DHI: 13.07 -0.05 -0.38%) and M/I Homes (MHO: 13.39 +0.08 +0.60%) poising for a rebound move. In this posting, we feature ITB ( Home Building Index fund ). ITB is again testing $13.14 resistance for the 3rd time this month. Note the last two trading sessions ended with high volume on white candlestick. RSI and MACD are showing bullish convergence as well. I expect ITB to break through $13.4 within the next few trading sessions and march towards $13.96. When sector stocks show the same bullish behaviour, it generally indicates a stronger trend.

AMR Corp (AMR: 8.71 +0.22 +2.59%)

In the previous post, i have discussed about airline stocks soaring higher. This post will look at another airline stock AMR. The chart pattern is a piped bottom as indicated in the charts which is a bullish reversal signal. AMR did a strong move last week  from $7.70 to $8.7 which is the breakout point for this consolidation zone. Although the decreasing volume suggests that the stock may have a tendency to pull back first before attempting to break through $8.7 again. Anyway, UAL and LCC have broken out last week and I expect this sector stock to still be bullish in the coming week.