Shares of KB Home (KBH) fell nearly 15% in trading Thursday, reacting to its most recent earnings report. Unfortunately, the charts do not offer hope for a quick turnaround.
In this daily chart of KBH, above, we can see that prices have been under pressure since late June. We can see a death cross in early October when the shorter 50-day moving average went below the slower moving 200-day average. Selling became more aggressive in December and the slope of the decline for KBH got steeper. The On-Balance-Volume (OBV) line peaked in October, telling us that volume has become heavier on down days for KBH. The Moving Average Convergence Divergence (MACD) oscillator is bearish with values below the zero line.
We needed to look at a five-year chart, above, of KBH to find next support. The OBV line has been moving sharply lower in 2015 on this timeframe. The MACD oscillator is negative and the 40-week moving average is pointed down. Looking all the way back to 2012 we see the congestion around $10 for KBH. This should act as support, but a probe into the single digits should be expected.