Homebuilder PulteGroup (PHM) is up sharply Thursday on the heels of its Q2 EPS beat and expectations of better market conditions in H2. Let's check out the charts and indicators to see if this strength in the share price can continue.
In this daily bar chart of PHM, below, prices gapped to the upside today. PHM is above the rising 50-day moving average line and above the bottoming 200-day moving average line. The 50-day line is moving up quickly with the price action and is close to crossing above the 200-day line for a potential golden cross buy signal. The trading volume has been active and looks like it has increased the past few weeks leading up to the earnings report.
The On-Balance-Volume (OBV) line has been moving up since early April and is close to making a new high for the move up. A rising OBV line tells us that buyers of PHM have been more aggressive. This helps to confirm and support the price advance.
The Moving Average Convergence Divergence (MACD) oscillator has just turned upwards for a new outright go long signal.
In this weekly bar chart of PHM, below, we can see a bullish picture or setup. Prices are in an uptrend and above the bottoming 40-week moving average line.
The weekly OBV line is bullish and at a new all-time high. The MACD oscillator is ready to cross above the zero line for a buy signal.
In this weekly close only Point and Figure chart of PHM, below, we can see a potential longer-term price target of around $70.
Bottom line strategy: PHM is on the move and buyers will need to pay up to get long. Traders should go long here and add on any one or two day dip. Risk a close below $36 for now. $70 is our longer-term price objective.