PulteGroup (PHM) - Get Report is a top-five gainer in the S&P 500 on Friday. Shares are up 2%, extending the rally off the November low to nearly 10%. Pulte is taking out a very heavy resistance area now and is setting up well for more upside.

Late last month, Pulte fell below its 200-day moving average and appeared headed for a much deeper selloff. The stock had already dropped over 18% from the summer high and had not entered oversold territory yet. Fortunately for the bulls, Pulte regained its footing near a key support area just above $17.50. This zone held the May and June Brexit lows and once again proved rock-steady two weeks ago.

As shares move back above the 200-day moving average as the week comes to a close, the $17.60 to $17.70 area is very likely a major bottom.

In the near term, investors should consider Pulte a buy near current levels. The stock is breaking through a key overhead trend line that links the August and October highs. Also in this area is the stock's 50- and 200-day moving averages. This breakout move could propel the stock much higher in the coming weeks. 

Pulte is a low-risk buy between $19.25 and $18.50. A close back below $18 would violate this week's low, signaling a failure. Also of note, Pulte and the bulk of the homebuilder sector have relatively high short interest ratios. This will certainly add fuel in the near term. Pulte's short interest ratio is 5.9.

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This article is commentary by an independent contributor. At the time of publication, the author held no position in the stocks mentioned.