• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing

Traders Need to Risk More to Go Long D.R. Horton at Current Levels

Let's review the charts and indicators for this home builder.
By BRUCE KAMICH
Apr 29, 2020 | 10:07 AM EDT
Stocks quotes in this article: DHI

Jim Cramer talked about home builders during Tuesday's Mad Money program. No one is going to buy a home with double-digit unemployment, Cramer said, but in the short term, stocks like D.R. Horton (DHI) could make for a terrific trade.  

 
Let's check out the charts of this Texas based home builder. 
 
In this daily bar chart of DHI, below, we can see that prices quickly plunged from around $62 in February to nearly $25 in the middle of March. Trading volume was very heavy into the March nadir and has declined as prices have recovered. 
 
The On-Balance-Volume (OBV) line declined from the middle of February to early April and is now slowly improving. The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed to the upside in late March for a cover shorts buy signal and is now very close to crossing the zero line for an outright buy signal. 
 
 
 
 
In this weekly bar chart of DHI, below, we went back five years to show the extent of the decline this year. Prices tested levels not seen since early 2016. DHI has rebounded in recent weeks but it is still below the declining 40-week moving average line.
 
The weekly OBV line looks much stronger than the daily line and has been in a long-term advance. The MACD oscillator has been narrowing towards a potential cover shorts buy signal. 
 
 
 
 
In this daily Point and Figure chart of DHI, below, a $68 price target is being projected.
 
 
Bottom line strategy: DHI may not dip to fill the price gap made Tuesday so aggressive traders may need to pay up to get long the stock. This means the risk of going long is greater as traders should still risk a close below $37 - the recent low.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Investing | Stocks | Technical Analysis | Trading | Housing Market | Construction & Engineering | Mad Money

More from Investing

Jim Cramer: What History Tells Us About Bond-Rate Scares Like This

Jim Cramer
Feb 27, 2021 2:01 PM EST

We could have some real pain ahead for some stocks. Five different kinds.

What's Next for Bonds, TLT and Interest Rates?

Bruce Kamich
Feb 27, 2021 12:30 PM EST

Thoughts and observations on Treasuries and the direction of interest rates.

Navigating a Market Correction

James "Rev Shark" DePorre
Feb 27, 2021 10:00 AM EST

The most critical factor in long-term market success is the ability to effectively navigate market corrections.

Kass: Time to Introduce a Financial Transaction Tax and End Weekly Stock Options

Doug Kass
Feb 27, 2021 8:15 AM EST

I believe more sensible regulations should be considered and enforcement is needed to adapt to gains in technology.

Corrective Action Produces Fading Confidence and Technical Damage

James "Rev Shark" DePorre
Feb 26, 2021 5:08 PM EST

It's dangerous to have too much exposure now, but the potential for a good recovery is there once interest rate issues are digested.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:32 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Navigating a Market Correction
  • 11:29 AM EST GARY BERMAN

    Where Does the Nasdaq Go From Here?

    Where does the Nasdaq Composite (CCMP) index go fr...
  • 12:31 PM EST GARY BERMAN

    Has the Short-Term Top Come for the XLF/Banks?

    The has triggered a long-term overbought signal ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login