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D.R. Horton, Inc. (DHI)

D.R. Horton stock forecast: buy or sell

Close on Oct 23rd, 2020
$73.06 +3.50%
3 months performance
6.50%
Published: October 24th, 2020 - 4.41pm EDT

D.R. Horton stock outlook

  • D.R. Horton stock skyrocketed 3.5% to close at $73.06 on the stock market yesterday.
  • The stock is configuring an uptrend pattern since last March, when it bottomed at $25.35. This rally marked a 188.21% gain
  • D. R. Horton, Inc. operates as a homebuilding company in East, Midwest, Southeast, South Central, Southwest, and West regions in the United States.

Important:
The viewpoints published in this article are personal and should not be followed as recommendations for you to buy or sell stocks. The author of this text does not have an understanding of the specific circumstances of the reader, his or her finances or his or her own best interests at any given time. All users should speak with their financial advisor before buying or selling any securities Thoughts are posted for educative purposes only

D.R. Horton stock charts

Should I buy D.R. Horton stock?

All successful traders recommend adhering to a trading strategy and not make decisions based on subjective opinions, rumors or feelings. Trading strategies are meant for helping you in the decision process of what stocks to pick and when is the best moment to buy them. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best

Is $DHI stock a buy?

In the current situation of D.R. Horton there is just one buy setup eligible:

Uptrend buy setup

D.R. Horton stock continues to trend higher since last March and has marked a gorgeous 188.21% gain. Price marked a local bottom in this uptrend at $70.28 on Thursday, and since then it bounced up a 3.96%. Now, it's only 11.16% away from breaking out above its last top and resume the uptrend. The new entry point is therefore at $81.21. If you decide to enter this trade, the suggested stop loss is at $73.09

Buy setupBuy pointStop lossRisk
Uptrend buy setup$81.21$73.0910%

Should I sell D.R. Horton stock?

When you own a stock with some profit, it's really hard to decide the correct moment to sell and get your benefits. Much like when we have to buy shares, deciding when is appropiate time to sell is not a whimsy decision, and we must follow our own trading style. We like very simple strategies to guide us on when is a good time to sell a stock. Be aware that these strategies are not intended for shorting $DHI stock

A golden rule is that you must never hold an operation that yields greater losses than those expected upon the buy. The moment to sell shares must always be ruled by the stop-loss (automatic or manual)

Is it time to sell D.R. Horton stock?

In the current situation of D.R. Horton there is not any eligible sell setup, so D.R. Horton stock holders with operations in green can keep their positions

Price lost SMA50 level

D.R. Horton stock gained 72.06% in 4 months while it was above the 50-d MA. On Wednesday, the price dropped below the 50-d moving average in a sign that the prior uptrend may have come to an end. For medium-term investors who made profits from the stock during the period the price was above the average, this flag should be a wake-up call and a trigger to sell the stock and get their profits

Analysts' recommendations to buy or sell D.R. Horton stock

Brokerage firms and financial institutions post stock ratings based on their views of the market and the fundamental and technical situation of the analyzed stock. Unfortunately, the accuracy of these predictions is not very high, and certainly not a direct buy or sell signal

In the last month, 2 ratings were published for D.R. Horton

D.R. Horton ratings

Brokerage firmRating
Oct 8th, 2020
JPMorgan Chase & Co. NeutralNeutral
Oct 16th, 2020
BTIG Research Strong buy

Technical analysis

Since last March, D.R. Horton has been printing an uptrend that so far marked a gorgeous 188.21%. During this uptrend, the price offered some entry points on the breakouts. Latest pullback was on Thursday, when price bounced at $70.28. Currently, it moves in a consolidation between its last top ($81.21) and its last bottom ($70.28)

SMAs overview

A favorite tool of many traders are the moving averages, that easily show trend direction. A moving average is calculated as the simple mean of the previous N periods (usually sessions). Moving averages are usually calculated on different periods depending on the trading timeframe 21, 50, 100 and 200 days are the most usual moving averages. You can found more about Moving Averages from sources like Wikipedia and Investopedia

DHI SMAs chart

Supports and resistances

Technical analysts use supports and resistances as a way to spot price points in the stock price action that tend to act as barriers, containing the price of a stock to move in certain direction. Supports are levels where the price tends to stop as it falls. This means that the price is more likely to "bounce off" this level rather than break through it. Nevertheless, if the price breaks down this level, it is likely to continue declining until meeting another support level. On the contrary, resistance levels are where the price tends to find resistance as it moves up. In the same manner, the price is more liable to "bounce off" at this level, and if it finally breaches this level, the price will rise easily until it approaches the next resistance

The current resistances are:

  • R1: $77.45 (6.01% above)
  • R2: $81.21 (11.16% above)
  • The current supports are:

  • S1: $70.28 (-3.81% below)
  • S2: $66.51 (-8.97% below)
  • S3: $62.15 (-14.93% below)
  • Bollinger bands

    This is an indicator that was introduced in the 1980s by John Bollinger. It comprises three bands that are superimposed on the price evolution chart:

    • The central band is a moving average, usually a simple moving average calculated with 20 periods
    • The upper band is calculated by adding to the value of the simple moving average 2 times the standard deviation of the moving average
    • The lower band is calculated by subtracting from the simple moving average 2 times the standard deviation of the moving average

    Since the price broke down the lower band on Thursday, the price has bounced up by 3.96%. The price is trading near to the lower Bollinger band, poiting some level of oversold in recent sessions. This is not a bullish indicator, as price can trade in these levels for many days and weeks

    DHI RSI chart

    Relative strength index

    The RSI (Relative Strength Index) is an oscillator-type indicator that measures price movements to spot when the share or financial asset is oversold or overbought. Like other oscillation indicators, the RSI moves from 0 to 100. The relative strength indicator is one of the best known and most widely used indicators, and it was invented by J. Welles Wilder in 1978

    The RSI dropped below the overbought level of 70 in late August after just crossing to the overbough zone for a single day (weak signal). The RSI value yesterday was 45.4. Since then, D.R. Horton shares sank a 3.21%

    DHI RSI chart

    Earnings and financials

    D.R. Horton, Inc. ($DHI) reported quarterly earnings of $1.72 per share in late July, meeting the Wall St consensus estimate of $1.71 per share.

    This compares to earnings of $1.35 per share same quarter last year, so posted EPS means an improvement of 27.41%.

    D.R. Horton ($DHI) will host the quarterly earnings call on mid next November. Forecasted earnings per share (EPS) for this quarter is $1.74, compared to $1.72 that was reported for Q3.

    DHI revenues and profits chart