Lumber Says Homebuilders Are a Buy
- Posted by Greg Harmon
- on November 28th, 2012
Now until December 2nd, the Annual Membership can be had at a Special Fibonacci Discount to the Rolling Monthly Rate. 38.2% off or $667.44. Follow the link here.
Most home builders reported earning a couple of weeks ago and were soundly pummeled by investors. It happened to Beazer Homes, $BZH, D.R. Horton, $DHI, KB Home, $KBH and Lennar, $LEN. Some down over 20% now most are recovering but have not yet clawed back half of their loss. Only Lennar is back to pre-earnings levels. When I think of building homes, the first thing that comes to mind is lumber. So how did that do over this period? Taking a look at the chart for random length lumber, it made new highs heading into these reports and held. Digging deeper it
Random Length Lumber, $LB_F
broke above an ascending triangle and has been consolidating there since October 31st. You may recall that this was the day the markets opened after Hurricane Sandy, but this move was not caused by the Hurricane. It started 3 weeks earlier. From a technical perspective the break higher brings a target of 480, or nearly 44% higher. New highs in lumber, and targets 44% higher? If this does not suggest that the recent pullback in Homebuilders is a buying opportunity then I do not know what is.
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- Gassing up Your Portfolio with ExxonMobil Earnings Ideas
- Premium Earnings 7-28-16: Amazon and Alphabet
- The Oil Rally Has Dripped Dry
- Charging up Trade Ideas for MasterCard Earnings
- Premium Earnings 7-27-16: Facebook and Whole Foods
- Flying Semiconductors are About to Soar
- Scarry Thoughts and Trade Ideas for Apple Earnings
- Premium Earnings 7-26-16: Twitter and US Steel
- Signs of a Gold Bottom
- 6 Trade Ideas for McDonald’s Earnings to Super Size Your Portfolio