Trade Summary: November 28, 2016

| November 28, 2016

November 28, 2016

 

Trade Rationale

The housing market is taking off… and I expect the number of homebuyers to climb into the new year.  Everyone’s going to be setting new year’s resolutions… and many new families and millennials will be looking to buy their first home.

It’s a natural time of the year and it bodes well not only for homebuilders, but for every company in the homebuilding food chain.

I expect these three stocks to do really well:

  • DR Horton (DHI)
  • Toll Brothers (TOL)
  • Pulte (PHM)

 

Trade Details

#1) Buy DR Horton (DHI) Jan 20th $29 Calls up to $1.25

Watch for DHI to move higher into the new year.  Profit exit points are $30 and $32.  Consider an early exit if the stock rallies after the new year.  Exit at $27.50 or $26.50 to conserve capital.

DR Horton

#2) Buy Toll Brothers (TOL) Jan 20th $32 Calls up to $0.85

Take profits if TOL trades above $32, or for aggressive traders, $34.  For risk control, the conservative exit level is $29.  Lastly, $28 is the final exit level for aggressive traders.

Toll Brothers

#3) Buy  Pulte (PHM) Jan 20th $20 Calls up to $0.60

We want this stock to climb into the new year.  Profit levels are $21 and $22, conserve capital at $17 or $16.

Pulte

 

Category: AOA Trade Summary

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