BALTIMORE (Stockpickr) -- "What's working right now?"
As an active investor, that's a question that you should be asking yourself constantly. That's been especially true in 2015, when the answer to the question of what's working has been "not much" all too often. The good news is that, in spite of the recent correction in stocks, some corners of the market are actually working for investors' portfolios right now. One of those is housing stocks.
Every industry from homebuilders to construction suppliers to development companies is showing at least a few glimmers of strength right now, the result of a residential real estate market that continues to be strong in 2015. So today, we're honing in on the housing-related stocks that look best-positioned for more upside as we steam into the fall.
To do that, we're turning to the charts for a technical look.
In case you're unfamiliar with technical analysis, here's the executive summary: technical analysis is a way for investors to quantify qualitative factors, such as investor psychology, based on a stock's price action and trends. Once the domain of cloistered trading teams on Wall Street, technicals can help top traders make consistently profitable trades and can aid fundamental investors in better planning their stock execution.
Without further ado, here's a rundown of five technical setups that are showing solid upside potential right now.
Taylor Morrison Home
Up first is $2.4 billion real estate developer Taylor Morrison Home (TMHC) . Taylor Morrison has been all over the place in 2015, swinging up and down in a wide range -- but zoom out on the chart a bit, and things suddenly start to look a little bit more orderly in shares of this home development company. The $21.50 level is the line in the sand to watch in September.
Taylor Morrison is currently forming an ascending triangle pattern, a bullish price setup that's formed by horizontal resistance up above shares (that's the aforementioned $21.50 price ceiling), and uptrending support to the downside. Basically, as this stock bounces in between those two technically-significant price levels, it's been getting squeezed closer and closer to a breakout above our $21.50 resistance line. When that breakout happens, we've got our buy signal.
Relative Strength, (not to be confused with RSI at the top of the chart) adds some extra confidence to the upside in Taylor Morrison right now. That's because relative strength is holding its uptrend from the start of the year, indicating that this stock is outperforming the rest of the market long-term. As long as that uptrend in our side-indicator stays intact, Taylor Morrison Home Corp. should keep on outperforming the rest of the market.