The market had a seemingly pretty bullish day on Wednesday, if we can continue this, it may just confirm that the rally is back on. Since this is the case, there should be plenty of opportunity to make some money in this market.
We have had our eyes on a couple different sector and industry ETFs, all of which look they want to make a move soon. XLK is the obvious one, if the tech sector continues to build off the strength of yesterday, carried by META and other tech names that have been on the move, expect this ETF to go higher. XRT is a name we wrote about earlier in the week.
After CPI came in a bit lower than expected XRT could be a trade to watch on a pullback. Despite all this strength, there were sectors that didn’t get to participate, this is where healthcare comes in. XLV is looking pretty sluggish in the face of the bulls running, keep this on watch as a potential short opportunity.
SPDR S&P Homebuilders ETF (XHB)
That would be the homebuilders ETF, XHB. Up nearly 25% over the last three months, we may have missed our golden opportunity, however, there is always another chance to make some money in the market.
With the overall market waking back up and looking ready to continue higher, we believe, XHB can only benefit from that bullishness. There is one thing to keep in mind, look for the best entry possible. If the ETF gives us a pullback, which looks increasingly likely after the type of moves the price is making, then we can look to enter with our risk management already fine tuned.
Currently, the pullback level to watch is 82.5. If prices drift lower to this level, gauge sentiment, look at price action, and determine if it is still a high probability trade. If you were swinging this trade…
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