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

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.


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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