The leading home-builder stocks have been very strong since the March lows. After all, low interest rates have always been a very good catalyst to lift the home-builders. The iShares U.S. Home Construction ETF (ITB) has surged by over $20.00 since the March lows and remains in a bullish sideways consolidation pattern on the daily chart. Leading home-builder stocks such as Lennar Corp (LEN), DR Horton Inc (DHI) and Pulte Group Inc (PHM) all have very similar patterns forming on the charts.
Toll Brothers Inc (TOL) is the home-builder that is catching my eye right now. This stock has been pulling back after it tagged it’s 200-week moving average around the $37.00 level. Currently, the stock has been steadily declining and is now trading around the $31.60 area. The stock should have very solid chart support around the $27.50 area. This is where the stock broke out on May 28, 2020. Any backtest into that level should be defended by the institutional crowd. I will likely be a buyer of TOL stock around that level.
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