Homebuilders are ready for a bounce

Babak at Trader's Narrative is cautiously optimistic on homebuilders. Considering the amount of negativity on them, they are primed for 20% plus bounce. I would look at taking positions in GFA, AVTR, BHS, NVR and some more at this levels. No guts, no glory. When there is blood on the street, sometime you find easy money.

If you think the financial sector has been roughed up, check out a long term chart for the homebuilders. They’ve gotten crushed.

Although it is always most difficult, it is rewarding to step in and buy when no one else is. Right now sentiment and the technicals have reached a crescendo of pessimism that usually signals an inflection point.

Take a look at the chart to the left. It is a survey from the National Association of Home Builders (NAHB) showing that only 28% of them see the housing market as “good or fair”. To put it in perspective, this is the lowest reading in 16 years. Very gloomy. Very doomy. Wouldn’t you say?

And there’s more. An economist with Moody’s economy.com wrote recently, “The bottom of the housing market appears nowhere in sight”. Ouch.

Best site to learn to trade

If you are serious about your trading and want to build an enduring edge, the Stockbee Member site might help you.

Members tell me they have tried a lot of things before coming to my site, and it has offered them the most extensive and detailed methods to swing and position trade. Members range from very experienced traders to novices.

No advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant tweets self-promoting the site, and no tall claims. Every member comes through word-of-mouth recommendations from existing members.

As a member, you will learn the basics of swing trading, momentum investing, growth investing, and risk management. You will learn about Stockbee Momentum Burst breakouts, Stockbee Trend Intensity Breakouts, Stockbee Episodic Pivots Breakouts, Stockbee Lemonade Strategy for 401k, and many other member-shared methods.

You will learn how to set up your own scans, how to select the right kind of stocks, how to set up stops, when to enter, when to exit, how much to risk, how to track your trades, and all other details about trading.

You will learn about developing your own methods and not relying on others for trade ideas. Develop your own edge. Once you develop your own method, you will have a lifelong profitable method.

The site gives you an opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different backgrounds and experiences willing to help each other. Members have shared their methods, scans, software, backtests, and market insights.

Every day, the emphasis is on continuous learning and upgrading of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors, and new traders.

You will see that many trading bloggers have been using my market timing methods, scans, and chart templates. They have developed their own methods based on my methods.

Almost every member comes through a recommendation of some of the leading trading bloggers and trading sites. 80% or more members continue to be members for more than 3 years. Most tell me that they stay on because every day they learn so much from the members' site.

If you are looking to develop your own trading strategy, the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on the members' site. Every method, every scan, every nuance is detailed, and all possible help is offered to design your own method.

10 comments:

Numerius said...: I disagree that the homebuilders are a worthwhile trade. I dont doubt that at some point there will be a bounce but finding it will be very hard. This to me is like trying to by bounces in telecom stocks during the tech implosion.; Jun 28, 2007, 10:58:00 AM
QUIKTDR said...: I agree on homebuilders but I would only start nibbling on prospective total position.

When you get an episodic signal do you enter immediately?

I notice many up/down signals in stocks like GS.; Jun 28, 2007, 11:37:00 AM
Pradeep Bonde said...: EP I enter some immediately, some after a pullback.; Jun 28, 2007, 11:41:00 AM
Pradeep Bonde said...: QUIKTDR
Send me your email address.; Jun 28, 2007, 1:40:00 PM
Jack said...: "DeadCat" bounce?

I don't think I want to pick up that "falling knife". I may miss the first move up but I'll let someone else get the first $$$ or the arrows.

Just my 2cents; Jun 28, 2007, 2:40:00 PM
Numerius said...: nobodys talking about it much but theres a lot of strength in non-residential construction. Why waste time on homebuilders when the non-res related companies are still breaking out?; Jun 28, 2007, 5:45:00 PM
Pradeep Bonde said...: Because anti trend rallies in heavily shorted stocks are very ferocious and you can make lots of money in few days time frame.
Look at the mortgage companies. Some of them tripled in few weeks.; Jun 28, 2007, 5:59:00 PM
Numerius said...: Honestly, i think money can still be made shorting the homebuilders. I dont short personally. These stocks remind me of techs after the crash, way way down but many still remarkably overvalued.

Even if you can buy homebuilder at the exact bottom, i think its likely to just be dead for quite a long time.

We havent seen a capitulation event yet, i would want to see that first for a margin of safety before buying.; Jun 28, 2007, 6:21:00 PM
QUIKTDR said...: Pradeep,

I e-mailed you my address.; Jun 28, 2007, 7:16:00 PM
Pradeep Bonde said...: Check your mailbox for a email message.; Jun 28, 2007, 7:29:00 PM

404

Recent Articles