Should Investors Move Into Lennar Before Earnings?

Here's our latest look at the homebuilder.

Homebuilder Lennar Corp. (LEN) is set to report its latest quarterly numbers on Tuesday, March 16. We hear that the housing market is hot but has that translated over to the stocks of the builders? Let's schedule a virtual home tour of LEN. 

In the daily bar chart of LEN, below, we can see that the shares have tripled from their March 2020 pandemic low. Despite these price gains the road higher has not been clear. Prices are currently above the rising 50-day moving average line but there have been numerous swings above and below the line over the past five months. The slope of the 200-day moving average line is positive.

The On-Balance-Volume (OBV) line and the trading volume show very choppy action since early October. Chart readers like to see a steady move higher but that is not the case for LEN. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been little help for investors in the past 12 months. 

 

In the weekly bar chart of LEN, below, we have a clear bullish picture. Prices are in an uptrend above the rising 40-week moving average line.

 

The weekly OBV line has been moving in the right direction (up) the past two years. The MACD oscillator turned up in January to a new buy signal. 

 

 

 

In this daily Point and Figure chart of LEN, below, we can see a potential upside price target in the $119 area. 

 

 

Bottom-line strategy: Like other homebuilders it seems like Lennar "they can't build them fast enough." I don't know what Lennar's quartely numbers will be but the charts are pointed higher and the Point and Figure chart suggests a $118 price target. Risk to $75.

 

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