The housing sector finally got a break today after the Commerce Department reported that September new home sales were up from the August numbers, to 770,000 in the month from 735,000 in August. Analysts were at best cautiously optimistic, stating that one month's report does not mean the downtrend in housing has been reversed, and also that the Commerce Department numbers are not always accurate. The figures were revised down by almost 10% in August, in fact.

However, Toll Brothers (NYSE: TOL), as a luxury home builder, is somewhat less exposed to the credit problems plaguing others around the industry. If you think the September sales numbers are a good sign, then now could be a good time to look at a bullish hedged trade on TOL.

Like others in the housing sector, TOL has been beaten down this year, from a high of $35.64 in February to a low of $18.85 in August. The stock has seen some gains over the last two months, but continues to struggle against resistance in the low $20s. TOL opened this morning at $22.16. So far today the stock has hit a low of $22 and a high of $23.19. As of 2:50, TOL is trading at $22.49, up $0.31 (1.40%). The chart for TOL looks bullish with slight deterioration, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.