Building Skyscapers with Long Antennas

The home builders have been a hot sector running higher despite weak home prices. Apparently they have been building skyscapers and not single family homes. Oh I do not mean physical buildings, but building the charts of their stock prices. Where building actual skyscrapers can be lucrative business, when they show up in a chart it is usually not good news. Take a look at these three.

D R Horton, $DHI

D R Horton, $DHI, has been moving higher off of the bottom in October but the latest leg up is the one that is flashing caution. After a large 3 day run Monday’s candle had a long antenna pointing higher, or upper shadow. This is a sign of the move running out of momentum. It could correct sideways but is also possible to finish building the skyscraper by retracing lower. A move below Mondays low on Tuesday would confirm a trade opportunity lower.

Lennar, $LEN

Lennar, $LEN, has also been rising since October and has made 2 consecutive skyscraper antenna, also referred to as Topping Tails, this also looks ready to pullback on a move under Mondays low at 25.35.

Toll Brothers, $TOL

Toll Brothers, $TOL, shows the same rise since October but more of a leveling through February before it pulled back last week. Now two consecutive upper shadows presents the same caution, even if not well above the price channel.

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
Dragonfly Caps Blog