GET DAILY SIGNALSHomebuilders ETF gets a bullish signal and the fundamentals support that signal
The home construction industry has been watched closely in the last few quarters. The housing numbers have been stagnant and declining in the U.S. and the Fed was in a rate-hiking phase up until December. Those two factors led to a selloff in a number of housing stocks and it caused the SPDR S&P Homebuilders ETF (NYSE: XHB) to fall sharply. After the low in December, the XHB bounced back, primarily as the overall market bounced back. The ETF did do something different from the rest of the market over the last three and a half months though—it formed an upward sloping trend channel.
We see on the daily chart how the highs from February, April, and May form the upper rail while the low from March and the recent low form the lower rail. The lower rail is very close to the 50-day moving average and that means the area should be a strong support level.
The Tickeron AI Trend Prediction Engine generated a bullish signal for the XHB on May 13 and that signal is predicting a gain of at least 4% over the next month. The signal showed a confidence level of 72% and previous predictions toward the ETF have been successful 86% of the time.
Due to how I use Investor’s Business Daily’s fundamental rating system, I knew there were several homebuilders with strong EPS ratings and SMR ratings. I looked at the 10 most heavily weighted stocks in the XHB and put together the following table.
These 10 stocks account for almost 50% of the holdings in the XHB on a weighted basis. As you can see, the average EPS score for the 10 stocks is 84.9. Using the traditional grading system of four points for an A, three for a B, etc, the average SMR grade is 3.2, or a B+.
What this tells me is that the companies that are held in the XHB have some pretty solid fundamentals.
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Harry Richardson — Algorithmic Trader & Strategy Developer Harry is an algorithmic trader specializing in impulse and breakout trading strategies across cryptocurrency and equity markets. With more than 10 years of experience in developing automated trading systems, he focuses on building structured algorithms designed to capture momentum while maintaining strict risk control. His approach combines quantitative analysis, real-market execution, and continuous performance monitoring. Vitalii prioritizes risk management, drawdown control, and strategy stability over short-term optimization, ensuring algorithms are adaptable to changing market conditions. He has developed and tested hundreds of automated strategies, working extensively with live trading environments, forward testing, and portfolio-level algorithm management. His work centers on transforming trading ideas into fully operational, scalable automated systems.
XHB in upward trend: 10-day moving average broke above 50-day moving average on November 02, 2026
The 10-day moving average for XHB crossed bullishly above the 50-day moving average on November 02, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 14 of 15 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 90%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 21, 2026. You may want to consider a long position or call options on XHB as a result. In 69 of 82 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 84%.
The Moving Average Convergence Divergence (MACD) for XHB just turned positive on October 15, 2026. Looking at past instances where XHB's MACD turned positive, the stock continued to rise in 41 of 47 cases over the following month. The odds of a continued upward trend are 87%.
XHB moved above its 50-day moving average on October 29, 2026 date and that indicates a change from a downward trend to an upward trend.
Bearish Trend Analysis
The 10-day RSI Indicator for XHB moved out of overbought territory on November 05, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 39 similar instances where the indicator moved out of overbought territory. In 33 of the 39 cases, the stock moved lower in the following days. This puts the odds of a move lower at 85%.
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 56 of 65 cases where XHB's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 86%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where XHB declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 88%.
XHB broke above its upper Bollinger Band on November 04, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for XHB entered a downward trend on October 23, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
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