Missed the Home Builder Run? Consider These Ancillary Plays

Recent earnings in the tech space have left a lot to be desired, putting the Nasdaq Composite and Nasdaq 100 in vulnerable positions. The good news is that plenty of bullish decent technical setups remain outside of the technology sector. The question is: Will fresh institutional money come in from the sidelines between now and the end of the year? With the U.S. Dollar Index looking as weak as it is -- not to mention bonds -- the bull case for stocks is still a compelling one.If you missed the recent run in the home builders, don't worry. Instead of chasing them when most are well past proper entry points, focus on ancillary plays -- firms that stand to benefit from a continued recovery in the housing market. Housing start and building permit data earlier this week smashed expectations. New housing starts spiked in September, rising to 872,000 from 758,000 in August -- the most since July 2008.Fortune Brands Home & Security (Nasdaq: FBHS) could still be in the early stages of a move, and shares remain under accumulation. It was spun off by Fortune Brands (NYSE: FO) a little over one year ago. The company, with a market capitalization of $3.1 billion, provides home security, kitchen and bath and tool storage products for the home-building market. Some of its brands include Master Lock and Moen faucets. Expect strong numbers from the company when it reports earnings next week on October 23. It's expected to earn $0.25 a share, up 32 percent from a year ago with sales up six percent to $899.6 million. In 2011, FBHS earned $0.60 a share. This year, the Thomson Reuters consensus estimate calls for profit of $0.84 a share, up 40 percent from 2011. Next year, profit should come in at $1.13, up 34 percent from 2012. FBHS is firming up at its 10-week moving average for the first time after clearing a base in August. It's just the kind of supporting action you want to see after a breakout. On a weekly chart, the 10-week moving average is an area where institutional investors will often come in and add to a position.Meanwhile, SPDR S&P Homebuilders ETF (NYSE: XHB) is showing similar technical action. After a technical breakout in mid-August, it's firming up at its 10-week moving average for the first time. Its name might lead many to believe it's a pure-play home builder ETF but it's not. Only two home builders are inside the fund's top-10 holdings: PulteGroup (NYSE: PHM) and Lennar (NYSE: LEN). Lowe's Companies (NYSE: LOW) and Williams Sonoma (NYSE: WSM) are the two highest-weighted stocks in the fund at 3.79 percent and 3.6 percent respectively.