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Whirlpool might be the best way to play the homebuilders, says top technician

Chartmaster says this homebuilder stock is building for a breakout

Lennar will become the second major homebuilder to report quarterly earnings before the bell Wednesday, following KB Home's somewhat disappointing report from last week.

KB Home beat the street's EPS estimates, but came up short on revenue. Despite the less-than-stellar tape, the stock is up nearly 6% over the last week and a whopping 70% on the year.

On the whole, the homebuilders are on fire. The ITB Home Construction ETF that tracks the space is up a very respectable 43% in 2019, while the XHB Homebuilders ETF has gained 35%.

But if you're not interested in chasing those already huge gains in the homebuilder trade, Carter Worth, head of technical analysis at Cornerstone Macro, stopped by "Options Action" on Friday to explain why he thinks there's a stealth way to play catch up with the space.

"Whirlpool has been a laggard, and I think that's the opportunity," said Worth. "Basically, what you're talking about is no progress for the better part of five years."

Over that same time span, the ITB, which contains names like Toll Brothers, Lennar, Pulte Group and other top performers, has skyrocketed 90%. According to Worth, though, there are signs that the bottom is finally in for Whirlpool, and it could be due for a big bounce.

"If you put in the [200-day] moving average, you'll see one way to measure trend is that this is clearly a downtrend, and for what it's worth, this is an uptrend," said Worth, "A series, yes, of higher lows and higher highs.

"So, the betting here is that this is actually going to break out."

Zooming in on Whirlpool's more recent history, Worth pointed out that more technical indicators seem to be pointing to a leg higher for the stock. In addition to making higher lows and higher highs over the last nine months, the name has actually broken above its recent uptrend.

"The tension is there, the levels are remarkably precise, as is so often the case with a good setup, and here today, the last two days, we just punched above [that trend line]," said Worth.

"I think we've got plenty to run here, and I want to play Whirlpool on the long side."

Whirlpool was up nearly 1% in Monday's session.