D.R. Horton Is Building Toward the $50 Mark

 | Aug 03, 2017 | 4:01 PM EDT
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dhi

We haven't looked in on D.R. Horton, Inc. (DHI) since last year, when we saw the potential for a rally: "Aggressive traders could go long DHI at current levels risking below $26 and add to longs above $30. A rally toward $34 could materialize as we move into 2017."

Now that DHI has reached and exceeded our $34 price target an update is in order. (Even a broken clock is right twice a day.)

In this daily bar chart, below, we can see the that DHI has had a pretty good first six months for 2017. Prices are above the rising 50-day moving average line and the rising 200-day line. In mid-March there was a bullish golden cross with the 50-day average climbing above the slower-to-react 200-day average.

The daily On-Balance-Volume (OBV) line generally moved higher from a November/December low. The Moving Average Convergence Divergence (MACD) oscillator gave a take profits sell signal in late June but is has been above the zero line since January.

In this weekly bar chart of DHI, below, we can see how this stock has performed for the last three years. Prices are above the rising 40-week moving average line. The weekly OBV shows three trends -- an uptrend from late 2014 to late 2015; a neutral trend until early 2017; and then a new uptrend. The 2017 uptrend in the OBV line is a positive for its price outlook. The weekly MACD oscillator is in a bullish mode.

In this Point and Figure chart of DHI, below, we can see an upside breakout at $34.56 (see the "6" on the chart). A new long-term price target or price objective measures to $51.12.

Bottom line: If you are long DHI continue to hold. Raise stop loss protection to a close below $33. I will settle for the round number of $50.

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