Can $TREX get some traction before Earnings? – January 30, 2024
This is Scott with your Chart of the Day. I want to take a look at Trex ( NYSE: TREX ), but first off I want to start with the Homebuilders ( NYSEARCA: XHB ).
We’ve had a lot, in terms of narrative, when it comes to hard landing and soft landing. But if you just look at the Homebuilders ( NYSEARCA: XHB ), Homebuilders ( NYSEARCA: XHB ) haven’t really been worried about anything since October, it’s just gone up. Yeah, we’ve had these whoopity dos under the major moving averages, but they’re brought back up.
Now we’ve above all these moving averages as we lean into what could be some rate cuts down the road. So I definitely want to bring your attention to the Homebuilders ( NYSEARCA: XHB ) and tonight look at Trex ( NYSE: TREX ). Trex ( NYSE: TREX ) is a decking company. If you are building a home you might want to build a Trex ( NYSE: TREX ) deck.
What I like about this stock is the fact that it looks a lot like the Homebuilders ( NYSEARCA: XHB ) so you can look at XHB ( NYSEARCA: XHB ) and then bring your analysis into Trex ( NYSE: TREX ) and look for the same thing. What I want to see from Trex ( NYSE: TREX ) is a move above this clear resistance level. I have an early alert on this, right around 84.10, and I want to see a move through 84.10 coming on higher than average volume.
Now, I really want that volume to come into the stock and really prove to me that it’s ready to break out. Because a lot of times you can get a false breakout signal if you don’t have good volume behind it. It’s not mandatory but it just really kind of increases the probability that a stock is going to hold that move higher.
So keep an eye on Trex ( NYSE: TREX ), I’m watching for a break, through 84.10 coming on volume. And just a reminder, they do have earnings but not until the end of February, so there is still time.
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