For his "Executive Decision" segment of Mad Money Thursday night, Jim Cramer sat down with Sheryl Palmer, chairman and CEO of Taylor Morrison Home (TMHC) , to get a read on the housing market now that new home starts are at 12-year highs thanks to plunging interest rates.
Palmer said while home affordability is an issue for some buyers, it's not as bad as the media would have you believe. In reality, she said interest rates are low, incomes and savings are up, which combine to create a great time to buy a home.
When asked about those buying homes, Palmer said she's seeing lot of strength from both the millennials and boomers, with about a third of their buyers coming from the millennial category. Those buyers are getting married and are having children and want to settle down just as their parents did.
Let's check out the technical story before we go to closing.
In the daily bar chart of TMHC, below, we can see that prices have been in a durable uptrend since October. There have been some pullbacks along the way but new highs continue to be set. TMHC is above the rising 50-day moving average line and the bullish 200-day line.
The On-Balance-Volume (OBV) line shows a similar uptrend to confirm the price gains. The Moving Average Convergence is rising and above the zero line.
In the weekly bar chart of TMHC, below, we can see that prices are climbing their way back to the prior high around $28. Price is above the rising 40-week moving average line.
The weekly OBV line just made a new high telling us that buyers of TMHC have been more aggressive. The MACD oscillator is bullish.
In this Point and Figure chart of TMHC, below, we can see a nearby price target of $27.34.
Bottom-line strategy: Continue with the long side with a sell stop below $22. New highs look likely.