Shares of D.R. Horton (DHI) have climbed steadily the past two-plus months and have broken out of a lengthy consolidation pattern. Let's check and see where prices could head and whether we can profit from it.
In this daily bar chart of DHI, below, we can see that prices traded sideways to slightly lower from April to early October. Prices have climbed steadily from early October and this month broke out above the May high. DHI is trading above the rising 50-day moving average line and above the rising 200-day moving average line. We can see a very recent golden cross buy signal as the 50-day line has crossed above the 200-day line.
The On-Balance-Volume (OBV) line shows a slight decline from June to early October followed by a new rising trend. A bullish OBV line tells us that buyers of DHI are being more aggressive with heavier volume being traded on up days. The Moving Average Convergence Divergence (MACD) oscillator is bullish.
In this weekly Japanese candlestick chart of DHI, below, we can see a bullish picture. Prices have been in a longer-term uptrend the past three years and have spent most of its time above the rising 40-week moving average line.
The weekly OBV line is positive and the MACD oscillator recently turned bullish again.
In this daily Point and Figure chart of DHI, below, we can see a recent upside breakout at $108 and a $118 price target.
In this weekly Point and Figure chart of DHI, below, we can see a potential upside price target of $146.
Bottom line strategy: Traders could go long DHI at current levels risking to $102 for now. On the upside the $146 area is our initial price target.
