Value Level: Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual.
Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.
Risky Level: Price at which to enter a GTC limit order to sell on strength.
Notice from the table that the seven sell-rated homebuilders are overvalued by 25.6% to 76.6%. Over the last 12 months these stocks gained between 52.2% and 126.5%, but are projected to decline by 6.5% to 11.3% over the next 12 months.Given the magnitude of the homebuilder downgrades a prudent investment strategy is to book profits on these stocks as a source of funds. D R Horton (DHI) ($24.25 vs. $21.93 on Feb. 21): Downgraded to sell from buy and set a multi-year high at $24.76 on Friday. My semiannual value level is $20.50 with a monthly pivot at $22.89 and weekly risky level at $25.02. Hovnanian (HOV) ($5.99 vs. $5.29 on Feb. 21): Downgraded to sell from buy and is well below its Jan. 2 high at $7.43. My weekly value level is $5.35 with a semiannual pivot at $6.00 and monthly risky level at $6.57. KB Home (KBH) ($20.42 vs. $18.03 on Feb. 21): Downgraded to sell from hold and set a multi-year high at $20.76 on March 11. My semiannual value level lags at $10.77 with a monthly pivot at $20.69 and weekly risky level at $21.69.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV