This is the kind of stock I avoid buying even in a bullish market
This is the kind of stock I avoid buying however bullish others may be.
$DHI
Its industry (Homebuilding) used to be super strong. But it is decelerating.
The stock is overvalued with negative earnings growth.
On a bullish market day today, the stock is down as of midday.
On the daily Entry chart, it went to Jump-Thrust High and also Price Extreme High. Then, when everyone was apparently buying, came to a Big Move Down 3. That, in my view, was some serious players selling. It tried to recover, only to create a lower high. At which point it displayed a series of bearish Indecision. Today it is breaking down below a Memory trendline resistance. The stock is also coming out of a Volatility Squeeze - those sometimes lead to a bigger move in the breakout direction.
Nothing is bullish about the stock. I would avoid buying. Instead, if the weekly Memory trendline is broken, that will be a prompt to look for a short setup.
That is also how, using 360 analysis I keep ready for a possible trade. And sometimes, may take low-risk, defined-risk trades (using options verticals) ahead of the weekly Memory breakdown (if that happens!).
