NEW YORK (TheStreet) -- Readings related to the housing market have been mixed over the last month or so. This makes the chart patterns and earnings from homebuilders Hovnanian (HOV) and Toll Brothers (TOL) the latest news on housing. These homebuilders have had significant share price volatility in 2014 and both report quarterly earnings before the opening bell on Wednesday.
Here's how to trade Hovnanian and Toll Brothers.
Hovnanian ($3.90) did not have a great 2014 trading down 55% from as high as $6.80 on Jan. 3 to $3.06 into Oct.14. The stock then surged 44% trading up to as high as $4.42 into Nov. 25. The high was a failed test of the 200-day simple moving average at $4.37. The weekly chart shifts to positive given a close this week above a key moving average at $4.02.
Investors in Hovnanian should book profits by entering a "good 'til canceled" limit order to sell strength to a key technical level at $4.68.
Investors looking to buy Hovnanian on weakness enter a "good 'til canceled" limit order to buy weakness to a key technical level at $3.10.
Toll Brothers ($34.60) also had a tough 2014 trading down 28% from as high as $39.95 on March 4 to as low as $28.92 into Oct.13. The stock then surged 23% trading to as high as $35.48 into Nov. 24. The stock closed Monday just below its 200-day SMA at $34.63. The weekly chart shifts to positive given a close this week above its 200-week SMA average at $34.11.
Investors in Toll Brothers should book profits by entering a "good 'til canceled" limit order to sell strength to key technical levels at $35.70 and $42.75.