Beazer Homes USA (BZH) made a base pattern in February though the end of June. Prices have been rallying since early July and they don't like they are going to quit anytime soon. Let's check this base out further.
In this daily chart of BZH, below, we can see a 12-month turnaround. Prices go from a downtrend to a sideways trend and now back to an uptrend. July is the turning point as prices close above the rising 50-day moving average line. In early August the 200-day average line is broken and by the end of the month there is a golden cross of the 50-day and 200-day averages.
The On-Balance-Volume (OBV) line makes a low in February but turns up in a more vigorous move up in early July. The OBV line is poised to make a new high to confirm the price strength. This month the Moving Average Convergence Divergence (MACD) oscillator turns up over the zero line for an outright go long signal.
In this three-year weekly chart of BZH, below, we can see that the stock suffered a significant decline from early 2014, so it has something to reverse. Prices have rallied this year over the 40-week moving average line, which is now pointed upward (bullish). Look at the middle panel with the weekly OBV line. The OBV line on this timeframe really confirms the rally this year and suggests strong accumulation and higher prices to come.
The MACD oscillator turned bullish in August when it went above the zero line for an outright buy signal.
Strategy: Use a pullback to around $12, if available, to go long BZH looking for a longer-term rally to the $16-$18 area.
