Standard Pacific Corp. operates as a diversified builder of single-family attached and detached homes in the United States. It constructs homes targeting various homebuyers, primarily move-up buyers, in metropolitan markets in California, Florida, the Carolinas, Texas, Arizona, Colorado, and Nevada. The company also provides mortgage financing services to its homebuyers; and title examination services to its Texas homebuyers. As of December 31, 2011, it owned or controlled 26,444 home sites and had 166 active selling communities. Standard Pacific Corp. was founded in 1965 and is headquartered in Irvine, California.
To review Standard’s stock, please take a look at the 1-year chart of SPF (Standard Pacific, Corp.) below with my added notations:
SPF has created a couple of important price levels to watch. First, SPF has formed a clear resistance at $8 (red), which would also be a 52-week high breakout if the stock could manage to break above it. In addition, the stock is climbing a short term, up-trending support level (blue) over the last (2) months. Eventually, SPF will have to either break the support or the resistance.
The Tale of the Tape: SPF has an up trending support and a 52-week resistance level to watch. A long trade could be made on a breakout above the $8 resistance or on a pullback down to the uptrending support. A break below the support would be an opportunity to enter a short trade.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT