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Home-Builders Stocks Hit The Roof

ByNicholas Santiago
Published 05/01/2012, 12:25 AM
Updated 07/09/2023, 06:31 AM

Most of the leading home-builder stocks are now trading into overbought territory. When a stock or sector becomes overbought it will be susceptible to near-term pullbacks. Today, most of the leading home-builder stocks are coming under early selling pressure.

Toll Brothers Inc (NYSE:TOL) is considered to be the leading stock in the sector. This stock has surged sharply higher since April 10, 2012 when it traded around $21.78 a share. Today, TOL stock is declining lower by 0.43 cents to $25.13 a share. This stock is trading above all of the major daily chart moving averages which puts the stock in a strong technical position. The problem with the stock at this time is that it is overbought and will likely need to consolidate or pullback before moving higher. Short-term traders can watch for intra-day support around the $25.00, and $24.65 levels.

Some other leading home-builder stocks that are selling off today include Lennar Corp (NYSE:LEN), D.R. Horton Inc (NYSE:DHI), and K.B. Home (NYSE:KBH). All of these stocks have similar patterns to TOL, traders should expect near-term pullbacks in all of these stocks before another attempt to move higher.
TOL CHART

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