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If you sold this ETF because you’re scared of Amazon, you made a big mistake, strategist says

This is what investors should watch in the homebuilder sector (Hint: it's not Amazon)
This is what investors should watch in the homebuilder sector (Hint: it's not Amazon)

Homebuilder stocks could see further upside, according to one strategist who sees a strong environment for the homebuilders despite a rough trading day on Thursday.

Matt Maley, equity strategist at Miller Tabak, is watching homebuilder stocks closely following Wednesday's U.S. housing starts data, showing that housing starts rose 8.3 percent to a seasonally adjusted annual rate of 1.22 million units, versus 1.16 million units expected.

Homebuilder stocks look poised to rise based upon this strong housing data, low-interest rates and a key homebuilder exchange-traded fund's strong performance this year. The iShares U.S. Homebuilders ETF, the ITB, has risen nearly 24 percent year to date. Homebuilder stocks are often used as a gauge of the broader economy's health.

The group took a hit on Thursday after Sears announced it would sell Alexa-enabled appliances on Amazon. Shares of some retail names like Home Depot and Lowe's fell sharply on Thursday following the announcement.

This announcement alone shouldn't serve as a huge challenge for these stocks, Maley said Thursday on CNBC's "Trading Nation," hours after the announcement was released.

"Let's face it. People nowadays, whenever Amazon does something, they shoot first and ask questions later, and that's what we seem to be doing in Home Depot and Lowe's this week. As those stocks bounce back, so will the rest of the housing group," he said.

Home Depot makes up 4.2 percent of the ITB, while Lowe's accounts for about 3 percent.

"As we move forward, it's going to be really important that people look at the important numbers in the housing sector, whether it be housing starts, existing homes and interest rates, and not look about what's going on with Amazon. Amazon's an important company and what they do is very important, but it's not the entire world," he added.

Shares of Amazon rose slightly in Thursday trading. The ITB fell a bit more than 1 percent.