iShares Dow Jones US Home Const. (ETF) (ITB), PulteGroup, Inc. (PHM): Chart Predicts a Double-Digit Breakdown in This Sector

Was the September rally a false hope? It looks that way as trading volume fell throughout the move higher. There is a good chance that prices will fade back down to their late August and early September lows in the $20.35-$20.40 area.

If the bears push them below that zone, then a major long-term breakdown will be confirmed, and I would not be surprised to see a drop to roughly $17.25, or about 17% downside from current levels.

Keep an eye on the performance of this ETF. It has already broken its long-term trend to the downside and a fresh breakdown below support would bode poorly for investors.

Recommended Trade Setup:

— Sell iShares Dow Jones US Home Const. (ETF) (NYSEARCA:ITB) short on a break below $20.35
— Set stop-loss at 21.50
— Set initial price target at $17.25 for a potential 15% gain in eight weeks

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