We're looking at at the charts of Lennar Corp. (LEN) after noticing strength in Meritage Homes (MTH) , Taylor Morrison Home (TMHC) , and some others.
In this daily bar chart of LEN, below, we can see that prices have been strong since their "V" bottom in the middle of March. Recently, LEN has been stalled around the $65 area. Prices are above the rising 50-day moving average line and the rising 200-day moving average line. Earlier this month the 50-day line crossed above the 200-day line for a bullish golden cross buy signal.
The On-Balance-Volume (OBV) line has been rising since lows in March and early April, and its strength tells us that buyers of LEN are more aggressive and it can foreshadow further price gains.
The Moving Average Convergence Divergence (MACD) oscillator is crossing to the upside for a new outright buy signal.
In this weekly bar chart of LEN, below, we see a bullish picture with prices above the rising 40-week moving average line.
The weekly OBV line is going up and the MACD oscillator crossed above the zero line last month for an outright buy signal.
In this daily Point and Figure chart of LEN, below, we can see that a trade at $66 will be a breakout on this kind of chart. The chart also shows us a price target of $79.
Bottom line strategy: The charts and indicators of LEN are bullish and with the charts of other home builders strong, I feel good in recommending the long side of LEN at current levels and above $66. Risk a close below $60 and target the $79 area on the upside.
