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  • Writer's pictureT. Livingston

Homebuilders LEN, DFH Worth Watching

It doesn't take a real estate expert to know there is a housing shortage in the United States. While it's great to have a macro perspective on a sector, I never make a move without having charts to back up my thesis. With rising real estate prices and a lack of affordable houses, I've been closely monitoring the homebuilders group for potential buys. Lennar (LEN) and Dream Finders Homes (DFH) are two stocks in the group that I believe are worth watching.

I bought LEN on Friday for a few reasons. First, I really like what is going on with homebuilders on the whole. I've seen many stocks in the group setting up well, and TOL broke out on Wednesday on solid earnings. While Lennar had a rough 2023, earnings started to turn around last November. I really like the way LEN has found support near its' 50-day line. Buying near this key moving average allows me to manage my risk while purchasing a stock. On the weekly chart, I really like the strong action we saw starting in November 2023. The strong volume looks like institutional accumulation to me. I've been monitoring LEN for quite some time now, but did not want to buy it while it was extended. With LEN not too far from its' 50-day moving average, it seemed like a logical buy point.

Dream Finders Homes (DFH) is another homebuilder I really think is worth watching. First, it has a history of solid earnings and sales growth. Second, management owns over 25% of its' shares, which is a sign they are bullish as well. Third, and most importantly, DFH has a very solid chart. I particularly like the heavy volume that came in towards the end of 2023. That looks like institutional accumulation to me. DFH looks great on its' monthly, weekly, and daily chart. Ideally, I'd like to see it build out its' handle a little more in the early part of next' week. This would allow me to buy it near the 50-day moving average or on a breakout.

Risk right. Sit tight.

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Full Disclosure: I currently own LEN.

Disclaimer: This information is issued solely for informational and educational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. None of the information contained in this post constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. From time to time, the content creator or its affiliates may hold positions or other interests in securities mentioned in this blog or the associated Twitter and Instagram feeds. The stock or stocks presented are not to be considered a recommendation to buy any stock or stocks. This material does not take into account your particular investment objectives. Investors should consult their own financial or investment adviser before trading or acting upon any information provided. Past performance is not indicative of future results.


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