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Even though the home sales data was much worse than expected, the homebuilding stocks closed well off the lows. The SPDR S&P Homebuilders ETF (XHB) approached the year-long support in the $13.50 area before rebounding to close just slightly lower on the day. Homebuilder Lennar Corp. (LEN) dropped below $12 before reversing to close the day higher on heavy volume. This action is not surprising as LEN has $1 billion in cash with a book value of $13.38. Resistance is strong just below $14.
Tom Aspray, professional trader and analyst, serves as video content editor for MoneyShow.com. The views expressed here are his own.
