If you read all the way through Tuesday’s weekly watchlist, you’d know I liked some plays in the Real Estate sector. Well, turns out that was a good call, as one of those plays is your Fortune Research free trade alert for this week!
As I mentioned then, it’s the only sector that has a supply-demand imbalance working in its favor, and it’s bullish over multiple durations…
Well, let’s expand on that ahead of your free trade alert…
The Real Estate sector has been one of the best performing asset classes over the past nine months. Housing inventories are at all-time lows, while demand prices remain consistently — and surprisingly — high.
Source: Bloomberg
While it is stalling in the middle of its recent range, this week’s option expiry-driven sell-off is giving us a great chance to buy an “adjacent sector.”
Your Fortune Research Free Trade Alert
The iShares U.S. Home Construction ETF (NYSEArca: ITB) primarily consists of homebuilders like DR Horton, Lennar and Toll Brothers. It also contains home improvement project supply companies like Sherwin-Williams along with everyone’s favorite retailers, Home Depot and Lowe’s.
All of the underlying companies within ITB have positive tailwinds heading into the back half of the year, as housing starts from 2020 begin to resupply an overinflated market and new homeowners are personalizing their new digs.
Source: Bloomberg
ITB is trading near recent lows, which are toward the bottom of its recent range. At first glance, it appears that we can go long for at least a few weeks…
Possibly a few months.
Well, that’s all for this week’s Fortune Research free trade alert. We’ll be back with more insights and a recap of the week. Until then…
Stay frosty,
Matt Warder
Fortune Research
