Stock Trends
Here come homebuilders
Good morning,
From the bottom-up view, this remains an incredibly divergent market. There are real reasons not to love the defensive leadership we’ve seen over the past few months, but as we laid out in Monday’s Playbook, cyclicals are still doing well.
And today, we’re going to review how one group that hasn’t been participating, homebuilders, looks poised to join the party to the upside.
We’ll also look at:
Hot List updates
Compelling long ideas that were finalists for the Hot List last week
Three recent rallies to fade
and more!
Momentum building in the homebuilders
PulteGroup just missed the Hot List
PHM has broken out of an inverse head and shoulders pattern and is hitting four-month relative highs vs. the S&P 500. This pattern looks a lot like the one early last year, and PHM proceeded to run 32% after breaking out.
Lennar’s 200-day has flattened, ready to go
Lennar has been the laggard within homebuilders, but note that its 200-day has finally flattened out, indicating the trend is no longer down. We held the 2025 lows to begin this year, and now are adding a right shoulder. A break of the red downtrend line, and we could quickly be back above $140.
D.R. Horton setting up for a run back to the 2025 highs
