| Has the slide in homebuilder stocks ended or is
there further downside? Most homebuilders peaked in the summer of
2005 and have slid over 50 percent. Has all the bad housingn news
been built in to curretn prices or is there more bad news ahaed?
The price chart of Toll Brothers (TOL) shows the typical price
pattern for the hombuilders. Prices incresed for five years before
peaking in the summer of 2005. then priced dropped tried to recover
and dropped more.
The bullish case shows prices near the low of their low-term price
channel. If this scenario holds trun, now is a good tme to buy the
hoembuilderd.
The next chart shows the bearish case for the homebuilders. Here
stock prices will continue to drop and retrest back into the long-term
price channel that has a shalloer slope han the bullish case.
Who knows which scario will play ouy, buyt regarless which one
you belive, be careful becasue prics are cuurretnly on the downside.
Dollar Tree Stores (DLTR),
an operator of discount variety stores, is on the price upside.
If DLTR continues to grow its earnings, the stock could make further
gains. But it will face resistance at $40.
Click on the blue chart to the right to see more information about
DLTR and three of its competitors.
Related Articles:
Price Patterns
- Resistance Levels Are Barriers to Price Upsides
Price Upsides
Often Occur in Three Stages
Posted March 17, 2007.
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