PulteGroup, Inc. (NYSE: PHM)

Pulte Group, Inc., through its subsidiaries, engages in homebuilding and financial services businesses primarily in the United States. The company’s Homebuilding segment is involved in the acquisition and development of land primarily for residential purposes within the United States; and the construction of housing on such lands. This segment offers various home designs, including single-family detached, townhouses, condominiums, and duplexes under the Pulte Homes, Del Webb, and Centex names. As of December 31, 2012, this segment had approximately 670 active communities. Its Financial Services segment engages in mortgage banking and title operations. This segment arranges financing through the origination of mortgage loans primarily for homebuyers; sells such loans and related servicing rights; and provides title insurance policies as an agent, as well as examination and closing services to homebuyers.

Please take a look at the 1-year chart of PHM (Pulte Group, Inc.) below with my added notations:

1-year chart of PHM (Pulte Group, Inc.)

PHM has been holding a very important level of support at $18 (blue) since the end of February. No matter what the overall stock market has done over that period of time, the stock has held that level of $18, which was also a key resistance back in October and November. The stock approaching $18 again should provide another bounce higher, but if the overall market continues to sell-off, PHM could finally break that support.

The Tale of the Tape: PHM has a very good level of support at $18. A trader could enter a long position at $18 with a stop placed under the level. If the stock were to break below the support, a short position would be recommended instead.

Would you like assistance in making your TBS trades? If so, email me at Christian@yolopub.com and let’s talk about working together one on one!

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!

Good luck!

Christian Tharp, CMT