This Homebuilder Looks Like It’s Headed South

• April 28, 2005
• Derrick Hobbs

Here’s
an idea that no one has heard over the last few months…. “Short a homebuilder”. 
I’m not talking fundamentals, and I’m not talking interest rates. I’m simply
observing a pattern that looks strong and will likely translate to a swing trade
opportunity.

KBH printed a H&S pattern over
the February to April time frame. Just recently the stock tested the neckline at
the same time it ran into a large Fibonacci price resistance zone. As you can
see the pattern and price zone is pushing price down and my initial target off
of this set up is 101-105. It’s not a giant opportunity but nonetheless, an
opportunity to extract a few points over a few days of trading in this
homebuilder…regardless of the interest rate environment. 

Until next time!

Derrik