The SPDR S&P Homebuilders ETF (XHB) has been one of the strongest ETFs in the market over the past several months. Last Thursday XHB formed a bullish reversal candle which was followed by Friday’s gap up. Although this price action is bullish, it does not provide an entry suitable to taking on the trade. In order for XHB to provide a quality buying opportunity we would like to see it set a “higher-low” and another “buy-pivot” similar to the reversal candle formed last Thursday. Under these circumstances we would consider XHB a potential buy entry over the new pivot.