Homebuilder Stock Trading Strategies Getting Hammered


The housing market had been a strong sector of the US economy. The only homebuilder I’m above his 50-day simple moving average is Lennar (LEN) and this stock has a positive weekly chart. DR Horton (DHI), Home KB (KBH), Pulte Group (PHM) and Toll Brothers (TOL) have negative weekly charts. Lennar gained strength as his recent quarterly earnings report beat analysts’ estimates.

On June 15, the National Association of Home Builders reported that their Housing market index for June fell two points to 81. Although this is a solid reading, it is the lowest measurement since August 2020. This still indicates strong demand in a short housing market. of stocks. The concern is the rising prices of building materials such as concrete and lumber.

Rising home prices are crushing first-time buyers despite low mortgage rates. The S&P Dow Jones indices recently reported that its 20-city composite of house prices rose 14.9% year-on-year in April.

Here’s a dashboard for five big home builders

Let’s look at the weekly charts and the main trading levels.

DR Horton (DHI)

DR Horton’s weekly chart is negative as the stock is below its modified five-week moving average of $ 91.51. It is well above its 200-week simple moving average or its reversion to the average at $ 54.43. The 12x3x3 weekly slow stochastic reading is down to 28.12.

Trading strategy: Buy a weakness at its weekly, semi-annual and annual value levels at $ 87.25, $ 82.70 and $ 65.40, respectively. Its quarterly pivot is $ 92.27. Sell ​​strength at its monthly risky level of $ 102.20.

Home KB (KBH)

KB Home’s weekly chart is negative with the stock falling below its modified five-week moving average of $ 42.99. The stock is above its 200 week simple moving average of $ 30.68, which I see as its mean reversion. The 12x3x3 Weekly Slow Stochastic Reading is down to 18.73 so it is now oversold.

Trading strategy: Buy the weakness at its semi-annual and annual value levels at $ 39.13 and $ 32.05. Sell ​​strength at its risky quarterly and monthly levels at $ 44.70 and $ 50.81.

Lennar (LEN)

The weekly chart for Lennar is positive with the stock above its modified five-week moving average of $ 98.63. The stock is above its 200-week simple moving average back to the average at $ 61.93. The 12x3x3 Weekly Slow Stochastic Reading increases to 41.78.

Trading strategy: Buy the weakness at its semi-annual and annual value levels at $ 79.96 and $ 69.51. Its quarterly pivot is $ 100.27. Sell ​​strength at its monthly risky level of $ 112.16.

Pulte Group (PHM)

PulteGroup’s weekly chart is negative as the stock is below its modified five-week moving average of $ 54.80. The stock is well above its 200-week simple moving average or its reversion to the average at $ 35.66. The 12x3x3 Weekly Slow Stochastic Reading is down to 33.45.

Trading strategy: Buy the weakness at its semi-annual and annual value levels at $ 52.07 and $ 40.13. Its quarterly pivot is $ 53.42. Sell ​​the force at its monthly risky level of $ 60.10.

Toll Brothers (TOL)

Toll Brothers’ weekly chart is negative, with the stock below its modified five-week moving average of $ 58.97. The stock is well above its 200-week simple moving average or its reversion to the average at $ 41.31. The 12x3x3 Weekly Slow Stochastic Reading is down to 28.38.

Trading strategy: Buy a weakness at its quarterly, semi-annual and annual value levels at $ 51.58, $ 46.21 and $ 43.89, respectively. Sell ​​the force at its monthly risky level of $ 67.86.


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