Pending home sales data just came out and crushed the consensus estimates. According to Dow Jones, the consensus was for a +1.0% month-over-month increase in pending home sales for March. There was actually a +4.1% increase in this figure, so we are seeing a nice pop from homebuilding stocks today, as reflected by the SPDR S&P Homebuilders ETF (XHB).

Lennar (LEN) is one of the stronger homebuilders, and it has received a nice bid after the news. Technically, today's bounce pushes the stock above a descending trendline that had previously acted as resistance. The 26 strike has also capped the shares during the past week or so, and is home to more than 10,000 puts in the May series of options. With nearly 19% of LEN's float sold short, this bounce is also putting pressure on the shorts. With a lot of skepticism toward this sector and a strong technical set-up, today's positive fundamental news could be just what the homebuilders need to break out of their recent congestion.