TRI Pointe Group, Inc. engages in the design, construction, and sale of single-family detached and attached homes in the United States. It operates a portfolio of 6 brands across 10 states, including Maracay in Arizona; Pardee Homes in California and Nevada; Quadrant Homes in Washington; Trendmaker Homes in Texas; TRI Pointe Homes in California, Colorado, and Colorado; and Winchester Homes in Maryland and Virginia.
Take a look at the 1-year chart of TRI (NYSE: TRI) below with my added notations:
Over the past five months, TPH has been trending higher, while also forming a nice trend line of support (green) along the way. Always remember that any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its relevance. A pullback to the TPH line provides trading opportunities, one way or another.
The Tale of the Tape: TPH has formed a trend line of support. A long position could be entered on a pullback to the trendline, with a stop placed below the level of entry. A short position could be entered if TPH were to break below its trendline.
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