Craig Johnson, chief market technician at Piper Sandler, said the charts forecast even more upside ahead.<\/p>\n
\u201cStay seated, but it looks like you could have 30-35% more upside, based upon the size and technical breadth of this technical setup here for lumber prices. There\u2019s no doubt that lumber prices are going higher,\u201d Johnson told CNBC\u2019s \u201cTrading Nation\u201d on Friday.<\/p>\n
Johnson said three homebuilder companies reporting earnings this week could benefit from increased demand for lumber \u2013\u00a0Home Depot,\u00a0Lowe\u2019s\u00a0and\u00a0Toll Brothers.<\/p>\n
\u201cIf you look at Home Depot as an example, this is a stock that\u2019s been in a downward trending price channel, and it\u2019s very close to inflecting and reversing that channel, and starting to take another leg higher. I think that\u2019s a stock that will probably have very good results,\u201d he said.<\/p>\n
Toll Brothers and Lowe\u2019s also look to be on the verge of a breakout after forming solid bases, Johnson added.<\/p>\n
Boris Schlossberg, managing director of FX strategy at BK Asset Management, added another stock play,\u00a0Lumber Liquidators, to the list of names that may benefit from higher demand. He said secular trends and a more permanent shift to a work-from-home environment could help the group.<\/p>\n
\u201cHome Depot and Lowe\u2019s are going to be very good long-term holds because the work-from-home phenomenon is not going to stop with Covid,\u201d Schlossberg said during the same interview. \u201cIf Lowe\u2019s and Depot report well, you could have a sympathy rally in Lumber Liquidators, which has done really well.\u201d<\/p>\n
Schlossberg added that these companies could see margin pressure tied to the higher cost of lumber, though he contends the potential upside outweighs that risk.<\/p>","protected":false},"excerpt":{"rendered":"
Lumber\u00a0prices topped $1,000 last week, a record high and a promising sign of a rebound in demand for building materials as the economy recovers from the\u00a0coronavirus pandemic. Craig Johnson, chief market technician at Piper Sandler, said the charts forecast even … Continue reading