Housing Recovery Stuck in Neutral

Tickers in this article: AWI FNF LII MAS OC RDN VMC WY

NEW YORK (TheStreet) -- The PHLX Housing Sector Index, or HGX, includes 19 stocks, of which 11 are homebuilders. On Monday, in Trading 12 Homebuilders With Mixed Earnings and Housing Data, I provided the most current data and analysis of the homebuilder stocks. All 12 had gains since my prior post of Dec. 19, Homebuilders Rebound on Single-Family Starts.

Today, I profile the eight stocks in the housing sector index that are not homebuilders. Five have traded lower for the year to date.

They are led by Masco , down 8.9%, followed by Weyerhaeuser , down 7.9% and then Owens Corning , down 7.5%. To me this is evidence the housing recovery has stalled at 60% of potential.

The National Association on Home Builders Housing Market Index came in at 57 in January, just above the neutral 50 reading. Single-family starts remain declined to an annual rate of 667,000 in December, which is about 60% of the more normal 1,000,000 to 1,200,000 annualized unit range.

The weekly chart of the housing sector index (195.63) has essentially been trading between its 50% Fibonacci retracement level at 173.80 and its 61.8% retracement at 202.05 for about a year now. This also suggests to me that the housing market is performing at 60% of its potential. The weekly chart will shift to negative with a close this week below its five-week modified moving average at 196.06.

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Armstrong World ($54.57 vs. $57.61 on Dec. 31, down 5.3%) reports quarterly results on Feb. 24 and analysts expect the company to earn 41 cents a share. The provider of flooring, ceilings and cabinets set an all-time intraday high at $61.63 on Jan. 16, then declined to $53.74 on Feb. 3 between its 200-day simple moving average at $52.55 and its 50-day SMA at $56.16. The weekly chart is negative with its five-week modified moving average at $56.73 and its 200-week SMA at $46.39. Armstrong has a hold rating and is 1% overvalued with a loss of 1.1% over the last 12 months. My monthly pivot is $54.03 with a semiannual pivot at $55.63 and quarterly risky level at $60.33.

Fidelity National Financial ($30.70 vs. $32.45 on Dec. 31, down 5.4%) reports quarterly results on Feb. 12 and analysts expect the company to earn 37 cents a share. The title insurance company set an all-time intraday high at $33.80 on Dec. 26, then traded as low as $29.65 on Jan. 29 well above its 200-day SMA at $26.75. The weekly chart is neutral with its five-week MMA at $30.78 and its 200-week SMA at $19.44. Fidelity National has a hold rating and is 29.2% overvalued with a gain of 21.4% over the last 12 months. My semiannual value levels are $28.73 and $24.44 with a monthly pivot at $29.55 and quarterly risky level at $33.57.