A Six Month Trading Range Falls


The homebuilder stocks have been quietly strengthening. Several of them are breaking out of months-long trading ranges, and are pulling their 50-day moving averages up with them.

KB Homes (KBH) traded within a tight range for 6 months, testing the 16 level several times. But the 16 level held. Buyers came in each time, although they were balanced by the sellers. It took 6 months to weed out the sellers, but it appears KBH's buyers are starting to take over.

KBH's recent breakout high was a 23% gain from the support level of 16.

On the weekly chart, this looks like a double bottom, or ‘W' pattern, or a ‘saucer' bottoming pattern, and these types of patterns typically precede longer-term up-moves. Many homebuilders have been reporting improving revenue and earnings.

In today's newsletter I cover my pick of the homebuilder stocks, one that broke out sooner and has already provided us with 17% gains. I also cover a medical stock for a new stock or add-to-position trade. This stock has already provided us with 12.7% gains over 5 weeks, and is starting to break out on strong institutional accumulation.

Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day.  To find out more, type in www.markettamer.com/seasonal-forecaster

By Gregg Harris, MarketTamer Chief Technical Strategist

Copyright (C) 2014 Stock & Options Training LLC

Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.

Gregg Harris is the Chief Technical Strategist at MarketTamer.com with extensive experience in the financial sector.

Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.

As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.

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