Chart of the Day: This Bullpen Name Is Worth Watching
Keep an eye on this stock — and this price level — in the coming weeks as it carves out a nice long base.
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With higher interest rates prevailing and a potentially weak economy in our midst it is understandable to see weakness in homebuilders. One name we have been following in TheStreet Pro Portfolio Bullpen is D.R. Horton DHI, which seems to have finally stopped the massive decline that started from last fall.
Notice during the decline a series of lower highs, lower lows on pretty strong volume. That indicates institutional selling across the board, as competitors such as PulteGroup PHM, Toll Brothers TOL, Hovnanian HOVand KB Home KBH felt the pain as well.
But we are looking at DHI in the base-building process. This alone should put a floor under the stock. Notice how on several occasions the sellers tried to break below $122-120 but the buyers held in? That right there tells us interest in this price level.
However, the indicators are not yet cooperating, even if we should optimistically grade the chart as neutral. The candles are still pink/purple, which are bearish on the GoNoGo composite of indicators. Stochastics (momentum) has rolled over, what you would expect during a basing period, though. MACD (moving average convergence/ divergence) is flat as a pancake.
So, we have this name on our radar screen as it continues to carve out a base. Once it starts up, let's say above $135, and sticks then we may review iy again for a new position in the portfolio. For now, we'll just sit and watch.
At the time of publication, TheStreet Pro Portfolio had no posiitons in any securities mentioned.
