Are the Homebuilders experiencing a case of deja vu? Is it 2006 all over again?
Based on the monthly chart of XHB, you can see that a series of bearish reversals took shape back in 2006, just prior to the financial crisis.
Fast forward to 2018 and we see something similar. It all started with a large bearish reversal candle in January and we’ve seen several bearish reversal wicks since then. The homebuilders are now testing important horizontal support at point (1).
Considering the downside ramifications (and broader market implications), it is critical that bulls hold this support line!.
