Eoin Treacy's view The pick-up in US housing starts and rebuilding following last year's storms saw demand for lumber rise. Prices rallied to the $400 area which has offered resistance on a number of occasions over the last twenty years and fell back sharply. Prices declined for 8 consecutive weeks and lumber found support yesterday near $275 and followed through to the upside today. This action represents a low of at least near-term significance and a clear downward dynamic would be required to check current potential for at least an unwind of the short-term oversold condition.

US listed Rayonier, Potlatch, Plum Creek, Weyerhaeuser and Canadian listed West Fraser Timber, Canfor Corp and Norbord Corp all pulled back sharply this week and have returned to test the region of their respective 200-day MAs. Provided they find support in the current area the benefit of the doubt can continue to be given to the medium-term upside.