Wednesday, October 25, 2006

The biggest home builder









Look at the stock of Hovnanian (HOV), which is the nation's biggest home-builder. The stock might tell us something about the forthcoming housing picture.

After a massive correction of 65%, HOV hit bottom at a price of 25 -- and rallied. But note that the histograms already appear to be rolling over, and RSI has started to move lower. HOV is now above its 10-week moving average but below its 40-week MA. It looks as though they've peaked.

Of course, the big question now is whether HOV breaks to a new low -- or whether it holds in a trading range above its last low of 25. If the housing industry is fated to be a disaster, I would expect HOV to break to new lows. If HOV can hold above 25, I would take that as a plus for the home-building and housing industry.

1 Comments:

Blogger vfsv said...

Here in Silicon Valley, Santa Clara County y-o-y volume was negative for the 22nd straight month (since December, 2004) and 25th out of the last 26 months.

For more data, please visit:
http://www.viewfromsiliconvalley.com/id273.html

We also track housing permits issued at:
http://www.viewfromsiliconvalley.com/id66.html

In the last 12 months, new permits issued represent a 4.3-month supply, regardless of other houses for sale. Since the "bottom" in late-2002, total permits issued represent a 16.6-month supply.

During that same time, jobs & population are essentially flat.

For more Silicon Valley-related news, please visit:
www.viewfromsiliconvalley.com

Thanks!

9:38 PM  

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