Sell Alert: D.R. Horton, Inc. (DHI)
DHI was recommended in the May 8 Investment Digest, issue 742, at $26.75 by Cabot Market Letter.
“Our trend-following indicators are both still positive, which is encouraging and still bodes well for the intermediate- to longer-term. But our Two-Second Indicator is now flashing a red light, mainly due to the collapse of all sorts of interest rate sensitive securities. The number of new lows has exploded during the past week, including triple-digit readings each of the past tree days.
“That doesn’t mean you should run for the storm cellar, but those readings, combined with the tired action among many stocks, provide enough evidence for us to take a couple of steps back and patiently wait for buyers to return.
“We came into today with a 26% cash position, and we’re going to add to that total by cutting our loss in D.R. Horton, Inc. (DHI, NYSE) tonight. The stock could bounce, but all homebuilders have been hammered by the aforementioned interest rate fears.”
Michael Cintolo, Cabot Market Letter, www.cabot.net, 978-745-5532, 6/4/13