Looking for short opportunities in the Homebuilders

Below is a chart of the Home builders ETF (XHB). As you can see it has made multiple lower highs over the past few months. The chart pattern appears to be a descending triangle, which is usually a bearish continuation pattern. A look at the stochastics also show that it is approaching overbought territory.

On Friday the XHB as well as many other Home builders rallied on what I believe was short covering. This has presented a good short opportunity, depending on what happens tomorrow.

I didn't initiate any shorts today because of the uncertainty about what Geithner is going to say tomorrow. The markets are very news driven right now and I wasn't comfortable sitting on a short going into tomorrow.

I found KBH, which looks to be one of the weaker names within the Home builder index. It also has made multiple lower highs while riding it's downtrend line. Stochastics on KBH are already in oversold territory. Once again I'm waiting to see what unfolds tomorrow, but as long as we don't get a push up through it's downtrend line I'll be looking to short.