XHB Trade Recap 013107

Last night I took a look at the Homebuilder stocks. A few market edges showed up, with my favorites being in TOL – Toll Brothers Inc., and XHB. Here’s a trade I took in the ETF for the sector, XHB.

What I really liked about XHB, was the NR7 it put in yesterday. The NR7 candlestick was .25 long. When the stock traded above it today, I set my stop below the low of that .25 candlestick. With the FOMC meeting today, I planned on selling my position before the meeting.

The trading plan also called for selling in 1/3 lots. A 1/3 to be sold at the 1R area, the second 1/3 to be trailed with a pivot stop, and the last 1/3 held until the FOMC results, or trailed stopped. XHB traded in an orderly fashion most of the day.

I sold AEM and GG into strength again today. Two more gold stocks that trade well include AU and MDG. SWIR had earnings tonight, and had gapped as high as the 16 range for a while during after hours trading.