The chart ofHome Loan Servicing Solutions (
) has shown disciplined-looking action since its IPO about 14
The stock is working on a second-stage flat base. The
potential buy point is 24.19.
A base involves a resting or consolidating area during a
Home Loan's weekly chart might give some investors pause. The
pattern shows two down weeks in above-average volume and no up
weeks in fast trade. But in the first week of April, the stock
closed in the upper 40% of the range -- a sign of
The daily chart shows eight down days in above-average volume.
Four of the days, though, show closes in the upper 60% of the
day's range -- which points to support.
How should an investor respond to this mixed picture?
Two things: First, wait to see if the stock's Relative
Strength line can hit a new high before the stock breaks out.
That development would be bullish.
Second, insist on strong volume if the stock breaks out.
Funds have been entering this stock over the past four
quarters through March. The number of funds holding shares grew
from 83 to 107, 172 and 183. The overall stake increased from 4.8
million shares to 12.8 million, 28.1 million and 34.7
Home Loan lost 2 cents a share in 2011, but earned $1.21 a
share last year. The Street expects a 52% pop to $1.84 a share
In April, the company set the monthly dividend at 14 cents a
share. The next ex-dividend dates are May 29 and June 26 for
payouts June 10 and July 10. The annualized yield is about
Home Loan's goal is to pay 90% of net income in monthly