Emerging Markets Builders on the Run Soon?

Our models have identified a potential reversal of downward momentum in two emerging markets home builders. Desarrolladora Homex, S.A.B. de C.V. ($HXM) is located in Mexico. Gafisa S.A. (GFA) operates as a homebuilder in Brazil.

We decided to trade these two stocks and spread them against their respective country market ETFs. For Mexico we used iShares MSCI Mexico Capped (EWW) and for Brazil we used the iShares MSCI Brazil Capped (EWZ).

 

We executed both transactions on a beta neutral basis. You can view the $HXM spread within our Analyzer here and the $GFA spread here.

 

If you want to learn more about spread trading we have uploaded some educational videos for you right here.

 

Happy and Profitable Trading.

 

Written by Michael Bigger. Follow me on Twitter and StockTwits.  

These idea originated from Aris David. You can follow Aris on Twitter and StockTwits.