D.R. Horton Broke Out. Now it’s Pulled BackD.R. Horton broke out to new highs last month, and now it’s pulled back.
The first pattern on today’s chart is the July 25 weekly low of $170.33. The homebuilder probed below this level a few times last week but managed to remain above it. That may suggest that new support has been established above its previous record high from April 2.
Second, the 21-day exponential moving average (EMA) is rising from below to the same price area. The 8-day EMA is also above the 21-day EMA. Those signals may reflect a bullish short-term trend.
Third, the 50-day simple moving average (SMA) recently crossed above the 100-day SMA. Both are above the slower-moving 200-day SMA. Those signals may reflect a bullish longer-term trend.
Next, a stochastics crossover has occurred near oversold territory.
Finally, you have the series of lower highs since the end of July. Traders may now watch for a potential breakout through that falling trendline – especially with key housing data scheduled for later this week. (NAHB’s homebuilder sentiment index is on Thursday, followed by housing starts and building permits on Friday.)
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