Are homebuilders not a bit overheated?
The industry score is super strong. No question about that strength.
However, several of the stocks are at Price Extreme High and even at/near JumpThrust High. What is more that some had weaker earnings results, but still went up. I would not like to buy such stocks at the top.
Instead, I am watching $KBH. Earning and revenue growth both are declining for two quarters and they both turned negative in the last quarter.
Today it gapped up but as of now, came below Early Range Low.
It is at the Upper Boundary, too extended. At Price Extreme High too.
The Stretch is overbought. Watch out for a bear Release.
It is displaying a bearish Indecision at the top as of now.
Will it create an island reversal? Or will fall below the Watermark resistanes in both the weekly and daily completing the false upside breakout?
You may keep an eye and see if it gives a low-risk shorting opportunity. That will be a lucrative one as the stock is at a very high price level.
When I shared the #CUE 360 analysis of $KBH yesterday, the Homebuilding industry was still strong.
Today that is ot the case. It is one of the bottom 20% Pace industries. That is, it is decelerating fast.
82% of $KBH's peer stocks are down today. So is $KBH.