Potential Bearish Flag in Homebuilder ETF
Homebuilders are among the worst-performing groups this year as interest rates increase. Now there could be a bearish continuation pattern in the 
iShares U.S. Home Construction ETF.
ITB sank to a 52-week low around $57 one month ago, followed by a period of consolidation. The lows have inched higher during this time, creating a potential bearish flag.
Second, notice the lower highs starting on April 21. These occurred near a falling trendline along the highs of January and March.
Third, the eight-day exponential moving average (EMA) has remained below the 21-day EMA. That suggests the intermediate-term downtrend remains in effect.
Finally, ITB has yet to reach potentially important support. The main level buyers may target could be closer to $51.50, the lows in September and October of 2020.
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Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
iShares U.S. Home Construction ETF.ITB sank to a 52-week low around $57 one month ago, followed by a period of consolidation. The lows have inched higher during this time, creating a potential bearish flag.
Second, notice the lower highs starting on April 21. These occurred near a falling trendline along the highs of January and March.
Third, the eight-day exponential moving average (EMA) has remained below the 21-day EMA. That suggests the intermediate-term downtrend remains in effect.
Finally, ITB has yet to reach potentially important support. The main level buyers may target could be closer to $51.50, the lows in September and October of 2020.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.