Trex-n-Effect Proving to Be a Summer Hit

In addition to an impressive upside move in most sectors and indices today in the face of the opening gap down in Netflix and indeed the QQQ at-large, downtrodden segments of the market like the homebuilders seem to be garnering more attention now from bottom-fishing longs. 

As we know, the XHB/ITB-related stocks have mostly been lagging the broad market since late-January. While the indices did indeed suffer sharp initial pullbacks, too, over the winter, most of them then recovered nicely while the homebuilders continued to struggle to hold any type of meaningful, sustained rally. 

We noted previously that Zillow Group (ZG and/or Z) was our favorite way to play any potential relief rally in the XHB/ITB in general, since ZG proved to be one of the more exciting growth stocks in the entire market. And that certainly remains the case. 

But Trex, below on its daily chart, is in the XHB ETF and is appearing, too.

The firm is known as a recycled materials manufacturer of wood-alternative decking, railings and other outdoor items--Outdoor decks, in other words, which are increasingly popular in today's new homes. 

TREX is sporting an impressive chart, with price operating smoothly in an established uptrend which, again, clearly outpaces the likes of DHI in the XHB. 

Earnings are scheduled for July 30th. But the larger point is the if the homebuilders stage a second half comeback in 2018 we can add TREX to the same basket as ZG of sector leaders.