KB Home (KBH) has not been inspected for more than a year but back then we said, "despite fears of higher interest rates, KBH made an important upside breakout on the charts. Traders and investors could buy KBH here and on further strength above $19, risking to $16.50 for now. $24 and then $36 areas are our upside price objectives."
KBH reached our $36 area price target in January and then turned lower. Let's check the updated charts.
In this daily bar chart of KBH, below, we can see that prices had slid lower since the zenith in January. In April KBH broke below the rising 200-day line and this month a bounce failed at the underside of that average line.
The declining 50-day moving average line is right on top of the 200-day line so we may see a bearish dead cross of these indicators in the days ahead.
The On-Balance-Volume (OBV) line has been pointed lower since January and signals that sellers of KBH have been more aggressive. In the bottom of the chart is the 12-day price momentum study which shows higher momentum readings since February. This is a bullish divergence when compared to the price decline but so far has not produced a rebound.
In this weekly bar chart of KBH, below, we can see a bearish layout. Prices are below the cresting 40-week moving average line. The weekly OBV line is bearish to neutral.
The weekly Moving Average Convergence Divergence (MACD) oscillator is in a bearish mode and currently crossing below the zero line for an outright sell signal.
In this Point and Figure chart of KBH, below, we can see the downtrend and a lower price target of $22.48.
Bottom line: KBH is pointed down and we find few technical reasons to buy it. A test of the $22 area could be the next short-term target.