For investors looking for momentum, SPDR S&P Homebuilders ETF (XHB Quick QuoteXHB - Free Report) is probably a suitable pick. The fund just hit a 52-week high and is up 133.9% from its 52-week low price of $23.95/share.

Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:

XHB in Focus

The underlying the S&P Homebuilders Select Industry Index represents the homebuilding sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the US common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Homebuilders Index is a modified equal weight index. The fund charges 35 bps in fees.

Why the Move?

The space has been hitting headlines these days for upbeat developments. Strong sales data and low interest rates are positives. The latest data shows that pending home sales in the United States grew last month by nearly 9%, a record. The National Association of Realtors data showed contract signings jumped 8.8% for the month of August. Sales of new single-family homes in the United States jumped 4.8% in August while sales of previously owned houses increased 2.4% from the previous month in August of 2020. All these figures explain the rally in the fund XHB.

More Gains Ahead?

It seems like the fund will remain strong, with a positive weighted alpha of 43.60, which gives cues of further rally.

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