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Prominent market commentator Jim Cramer said on Tuesday investors still have a chance to load up on homebuilder stocks before a possible run-up in their prices.
“The charts, as interpreted by Dan Fitzpatrick, suggest that we’re looking at a truly counter-intuitive bull market in the homebuilders, and even though that’s not supposed to happen at this point in the business cycle, the bulls keep running anyway,” Cramer said, according to a CNBC report.
The Federal Reserve has increased interest rates over the last year to rein in inflation, hammering stocks in every sector from tech to retail to financials. However, the price movement in homebuilder stocks in recent months indicated they’re going against the tide, Cramer said.
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Analysis: Cramer talked about the daily chart of the Dow Jones U.S. Home Construction index to explain Fitzpatrick’s analysis.
He noted that the chart shows a classic reversal pattern that resembles an upside-down person and that this pattern could turn into one of sideways trading as was observed in April through late November.
“As Fitzpatrick sees it, the homebuilders bottomed in June, and the group finally formed a new uptrend in December,” he said.
“The charts are screaming that it’s not too late to buy the homebuilders. In fact, you should still be buying them hand over fist,” Cramer said and mentioned that Fitzpatrick’s pick is Lennar Corp LEN.
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Image and article originally from www.benzinga.com. Read the original article here.