Homebuilders Bouncing Again

It seems that the slight EPS miss by Toll Brothers on Tuesday caused ITB to head lower to its support line, which held it in November. Today’s price action is strengthening this support line, as ITB seems to be bouncing from this support at the 42 level:

Source: Stockcharts.com

The same can be said about the relative strength line. This is quite bullish in the short-term, if it holds, the price might want to fill the gap that was left between Monday’s and Tuesday’s candles.

A similar price action can be observed on the chart of XHB, although it didn’t fall to its support line:

Source: Stockcharts.com