http://stockcharts.com/freecharts/gallery.html?lgih
LGIH is just above its $29.42 buy point after it failed a breakout move last month. It has bounced off the 50dma, showing excellent volume that last few days. It is still less than 5% above the buy point, so still buyable by IBD rules. If you want to trade around a position, this might be a signal. Note that the market is still “under pressure” and today we gave back strong gains to finish in the middle of the range, not a sign of confidence from the institutional buyers.
Building sector stocks have some strong ratings and big institutional buyers are accumulating them…
USCR (us concrete) composite = 99 and also ready to breakout.
LGIH composite rating = 97 (in buying range)
MWA = 95 (might be buyable)
IBP = 99 (too far extended to buy)
DW = 99 (too far extended to buy)
CCF = 97 (too far extended to buy)
MLM = 99 (may be starting a new base, had a nice run)
Many of these are the #1 rated stock in their particular group. LGIH is. But its group “Bldg-Resident/Comml Group” is actually much weaker than the suppliers listed above.
Installed Building is seen as growing its earnings per share 57%, 47% and 50% in the next three quarters.
IBP might be of interest to put on the watch list, very strong grower, but then if you add it to your LGIH you might be a little concentrated.