Homebuilders short squeeze ?

HOV.. conducting a huge sale on luxury homes this weekend. CEO was just on CNBC. Stock is acting very nicely here.

All charts from daily to weekly to monthly have RSI 14 under 30. The only other time HOV monthly RSI was under 30 was during 91 housing recession.

Everyone is short homebuilders. Everyone is negative on them. I think it can squeeze 50% easily. The stock is definitely acting very well here. That sale may be acting as a catalyst.

Also Fed meeting coming up. Homebuilders may squeeze on that one too.


High risk play , but I think downside is limited.

I think what will happen next is that next week they will come out and say that they have cleared a big chunk off their inventory through that sale. That will be a further catalyst.

Edited by ogm, 14 September 2007 - 01:48 PM.

In general I like your analysis, but how does your position change if they can't clear inventory? the sector is very cheap right now but the underlying secular trend doesn't look like a richening one. Remember, the Street is a strong subscriber to the Greater Fool Theory...

In general I like your analysis, but how does your position change if they can't clear inventory? the sector is very cheap right now but the underlying secular trend doesn't look like a richening one.

Remember, the Street is a strong subscriber to the Greater Fool Theory...

This is just a ST trade. For a few days. Not an investment. Just gaming the short squeeze potential setup.

If I'm wrong I'll bite the loss. But downside doesn't look huge here. Especcialy considering the huge short position that is cushioning the stock.

62% of the float is short. They are sitting on big gains. Doubt this stock is going to zero. So there isn't much gains left.

If you're sitting on 50-70% gain, whats left in the stock another 5% ? Not worth the trade anymore for the shorts.

http://stockcharts.c...05134&r=754.png