Homebuilding stocks have enjoyed a seriously bullish start to the week, as positive housing data released Monday and Tuesday have buoyed the group. And technical analyst Rich Ross of Evercore ISI says the homebuilders have much more room to run.
"I think you want to raise the roof here on housing, it's flat-out killing it," Ross said in a Tuesday "Trading Nation" segment. "Housing is just getting going."
Ross said homebuilding stocks, tracked by the iShares U.S. home construction ETF (ITB), have been in an uptrend all year, but have recently broken out from the tension of an ascending triangle formation, an indicator of further gains ahead.
Ross said ITB could break out to $33, driven higher by an increase in U.S. housing starts and outperforming stocks like Home Depot, which beat on sales on Tuesday.
The Commerce Department reported Tuesday morning that U.S. housing starts rose 0.2 percent in July, to the highest level since October 2007. Single-family starts drove the increase, with a rise of 12.8 percent. This follows news Monday that U.S. homebuilder sentiment climbed to the highest it's been in nearly a decade.
Similarly, the ITB ETF is trading at the highest level since mid-2007. Within that exchange-traded fund, the largest weightings belong to DR Horton and Lennar, each of which has seen shares surge about 25 percent this year.
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