REIC stocks

With many single family home stats to be released this week, it's a good time to revisit the Real Estate Industrial Complex (REIC) securities.

 The Homies don't look to be in very good shape.  After breaking their uptrend the Builders fell back setting a potential neckline at 17.  After catching a bid at the 200 day ema they rallied back up to the trendline setting a potential right shoulder.  Since then the XHB has pierced its 20 & 50 day ema and looks destined to test the neckline.  A break below targets 15.5.  The indicators are still pointing down, making a break look probable.  News stories suggesting home buyers are passing up new homes in favor of used homes certainly aren't help the builders prospects.

 In the meantime, many of those not buying/selling a home are turning to updating their current homes as shown in the Residential remodel index.  This is ancecdotally evident in my neighborhood where a slew of construction trucks can be seen on any given day.  Apparently the remodelers aren't shopping a Lowes however.  I't been locked in a downtrend since April.  It sure looks like it has a date with destiny at 20.5.

The giant, Home Depot, is fairing better.  It might be a long candidate at 34.8, but I'd keep this one on a short leash.

Lumber is in a nice basing pattern.  After rattling around the bottom of the base in May it has recently broken up.  The top of the base is the target, 320.  Of note, the paired trade suggested in May has worked out nicely (long Lumber, short Plum Creek).  PCL has a little more downside, but this trade needs to be lifted soon.

 The REITs have been unable to gain much upside traction since May.  They look to be forming a wedge.  A decent break down out of the wedge, below 60, sets the stage for a test of the 200 day ema around 56.5.  The indicators are pointing down, suggesting a likely break down.

Weyerhaeuser has a decent chance to hold support at 21 creating a pretty objective long entry.  A stop below 20 creates a pretty good risk reward situation.  In the meantime, it sports about a 2.8% yield.

Lastly, interest rates continue their downward trend.  1% on the 5 yr looks like the target.  With 2 yr rates in the PIIGS countries over 15%, the safehaven bid in the US Notes looks alive and well.  Now if we could figure out the debt ceiling resolution...but that's another story.
This week's Single Family Starts & Sales data may have an impact on the above securites.  I'm waiting with baited breath ;o)