OT: LGIH chart

From a fundamental point of view, LGIH is kicking butt, all factors are strong.

From a chart point of view, it had built a nice base (a.k.a consolidation, correction, rest) and was set up with a pivot point (breakout buy point) of $50.05. It did break out the other day on very strong volume and that is where I got back in. But it closed off its highs and then was down the next day. Not a good sign for TA/Chart traders. But the down day was on lighter volume, a mitigating fact.

Today we broke past the pivot on strong volume again, but this time stayed up there. For IBD traders, you can’t buy at higher than 5% above the pivot, which would be $52.55. (To be fair, IBD claims the pivot was at $46.99 because that is where it was forming a handle, but in my book there was no volume there so it eliminated that as a buy point and reverted back to 10 cents above the old high.) And all that is why Saul’s method is better!

Great IBD/Growth ratings…
Composite Rating 99 Pass
EPS Rating 91 Pass
RS Rating 94 Pass
Group RS Rating A+ Pass
SMR Rating A Pass
Acc/Dis Rating B+ Pass

On a related note, I bought Lenar today as it was still in the buy zone after having moved past the pivot of $54.96 on huge volume yesterday and more srong volume today. The big boys are buying up home builders and there is more to go. They support your price and you can win because as a small guy, you can get 100% of your position right away, and they have to take their time so they don’t drive the stock up. And this is where it is easier than Saul’s way (for some). You find stocks with great growth fundies, put them on your watch and alerts list while they are building a good base, then buy when they pass the right chart point. You always cuts your losses at 7-8%, often take some profits at 20-25%, but try to find and hold the big ones, like I did with NVDA buying it at the $33 breakout and still holding.

Happy investing.