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3 Home Construction Stocks Falling Out of Bed

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Losses are beginning to rack up in a handful of home improvement and home construction stocks.

3 Home Construction Stocks Falling Out of Bed

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Though the entire sector has had a glorious run since the February lows, a number of key players are rolling over. Some were spurred by earnings misses, an inability to live up to Wall Street expectations. Others are falling in sympathy with their peers.

Regardless of the reason, technical deterioration is starting to take its toll in today's stock picks. Support levels have been breached and trends of all types have reversed lower. While the future is always in flux, right now the charts are saying to steer clear of these stocks.

Behold, three home construction stocks to sell.

Home Construction Stocks to Sell: Home Depot (HD)

Shares of Home DepotInc (NYSE: HD ) are tumbling 1.7% today, worsening an already dismal technical situation.

The home construction kingpin's stock has been crumbling the entire month. With today's hit, HD stock has now entered correction territory by falling 10% from its 52-week high set just last month.

Support levels have been shattered and moving averages reversed during the draw-down. With HD now sitting beneath the 20-day, 50-day, and even 200-day moving averages, the future looks grim - for now, at least. While the technicals could always turn, the path of least resistance at this stage is lower.

If you think the pain keeps on coming, buy the Nov $130 puts for around $6.

Home Construction Stocks to Sell: Lowe's (LOW)

Never one to venture too far away from peers, Lowe's Companies, Inc. (NYSE: LOW ) is following (or perhaps leading) HD stock into the abyss. The drop in LOW stock commenced with a notable earnings miss, which has continued to weigh on the stock.

With today's reversal lower, the recent bounce is looking like that of the dead-cat variety. Like its predecessor on this list, Lowe's sits beneath all major moving averages, which means any and all future rallies should be viewed with a skeptical eye.

If you think the downtrend persists, buy the Nov $72.50 puts for around $3.50.

Home Construction Stocks to Sell: D.R. Horton (DHI)

D.R. Horton, Inc. (NYSE: DHI ) rounds out today's trio with a gradual rollover of its own. DHI stock boasts one of the worst looking charts of all home builders these days.

Relative weakness has plagued the Texas-based home construction company since July. Like Lowe's, the trouble for DHI stock began with its last earnings announcement. Profit-taking took root and has persisted ever since.

The recent price action for D.R. Horton has taken on the form of a low base which is close to breaking down. A breach of $29.50 may lead to its next large descent.

Grab the Nov $30 puts for $1.10 to join the bears.

At the time of this writing Tyler Craig had no positions in any of the aforementioned securities.

The post 3 Home Construction Stocks Falling Out of Bed appeared first on InvestorPlace .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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