BUY ALERT!… HOT HOMEBUYER STOCK
Hi everyone. Vlad Karpel here for Yellow Tunnel, an aggressive short-term trading service dedicated to all classes of traders seeking to up their game by leveraging the most cutting-edge AI platform available to retail and professional traders anywhere.
Every week my team brings to our audience of traders ongoing education, coaching and trading strategies to not just heighten our collective knowledge, instincts and awareness, but to hone the skills necessary to generate real wealth to our trading portfolios and create a truly rewarding personal experience for all our members.
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We recently launched our new Option Portfolio for paid subscribers to Aggressive Power Trader. This expansion of our service brings a major offering of quick-hit option strategies to our audience that thrive on trading options. We offer specific option trades of what our AI tools generate. All traders need to do is execute per the parameters set forth in the table of instructions.
Sign up today and get in on the next set of trades due out early next week!
CURRENT TRADING LANDSCAPE
We drove to Florida with the family to stay at my in-law’s condo for a couple of weeks before the kids have to start summer school. Since we have been at home for two months and the camps were canceled, everyone was getting restless. Here are two of the best things about Florida, besides the ocean and the daily dose of vitamin D.
Number one, best-lit highways in the US. We have driven through numerous states, on this trip and many others, I think this is the only State that actually has an eight-lane, fully lit, highway, from Jacksonville all the way down to Miami. Got to give credit when the credit is due.
Number two, free and AVAILABLE prime now delivery. Whatever we needed, we ordered at 10 pm, to avoid morning hunger and, low and behold, delivery between 7 am and 9 am was available, free of charge. Everything arrived as ordered the following morning, just in time for breakfast.
Ok, someone needs to explain to me why on earth we have not been able to order Amazon Prime Now in Illinois for months, even with the curbside pick-up?
The market is looking for direction and trading in the narrow range. Short term, the market is overbought. At this point, I expect only short term pullbacks and it is only a matter of time for SPY to trade above 200-day MA ($300 level by end of May/end of June). Short term, if SPY trades below $289 level in the next couple of days, there is still a high probability for the market to retest recent lows at $276.
I expect the market volatility and the three percent daily market moves to persist. At this point, I believe we have set the bottom (market can overshoot support and resistance levels especially when VIX is elevated).
I believe the worst part of the sell-off is behind us. Please monitor VIX level as current levels are above the historical average. My strategy is to buy 5-10% market corrections.
Based on our models, the market (SPY) will trade in the range between $275 and $310 for the next 4 weeks.
Considering all the hand-wringing surround the pandemic virus, one wouldn’t think buying a house would be at the top of the list of priorities, but apparently it is. Home buying has surged during the past six weeks as interest rates have plummeted taking the average conforming 30-year mortgage rate below 3.7%.
Home-buying demand is now 16.5% above pre-coronavirus levels on a seasonally-adjusted basis, driven by record-low mortgage rates.
Inventory of homes for sale can’t keep pace with demand. Jerry Diaz, a Redfin agent Nashville says, “I’m showing a lot of houses, but not selling as many as I could because they’re gone before we can write an offer.” Forty-five percent of the homes under contract in the seven days ended May 15 were on the market less than two weeks.
The migration from expensive metropolitan areas to smaller cities and towns appears to be picking up steam as buyers hunt for more space and lower prices.
Touring homes virtually with online 3D walkthroughs is becoming significantly more popular. For the week of May 10, nine percent of new homes listed for sale had a 3D model created using Matterport technology, up from only 2% in January and February prior to the pandemic. (source: Redfin.com)
To best play, the broad resurgence in the housing market would be to purchase shares of the SPDR S&P Homebuilders ETF (XHB). With 47.66% of the top ten holdings making up total assets, this hot ETF is led by Home Depot (HD) and Lowe’s Companies (LOW), both of which posted fantastic quarterly earnings this past week.
Include are also three of the biggest and best-managed homebuilders in D.R. Horton Inc. (DHI), Lennar Corp. (LEN) and NVR Inc. (NVR). It’s a fine way to play the sector strength without having to be a stock picker.
The one-year chart of XHB shows a powerful uptrend in place where further upside over the near-term looks promising. The shares are volatile and provide for an excellent trading vehicle if executed properly.
Speaking of strong uptrends, when my proprietary algorithms are applied to XBH, our AI-powered Seasonal Chart shows that XBH is poised to trade higher for the next 20, 30, 40 and 50-day periods.
It’s a rock-solid uptrend for aggressive traders to take full advantage of per my buy signals to maximize optimal entry points. I’ll be looking to trade this sector for those that want to trade on our signals within our Aggressive Power Trader advisory service.
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My trading algorithms found winning trade after winning trade. As of this writing, my total batting average since the meltdown is an astounding 94%.
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TRADE OF THE WEEK
When I trade individual stocks within a hot sector, I almost always go with the biggest name as this is where big money defaults to. As far as homebuilders go, D.R. Horton Inc. (DHI) is the go-to stock for those that want a pure play on homebuilders.
The National Association of Home Builders’ monthly confidence index rose seven points to a reading of 37 in May, the trade group said Monday. April’s figure had represented the lowest index reading since June 2012.
“The fact that most states classified housing as an essential business during this crisis helped to keep many residential construction workers on the job, and this is reflected in our latest builder survey,” Dean Mon, the association’s Chairman and a home builder from Shrewsbury, N.J., said in the report.
Index readings above 50 indicate improving confidence, while a figure below that threshold would signal the opposite. Last month was the first time since 2014 that the index has dropped below 50.
D.R. Horton has relatively low exposure to areas that are not allowing residential construction. During the first-quarter earnings conference call, it deemed residential construction in Washington state, the San Francisco Bay area, New Jersey and Pennsylvania to be a non-essential activity. According to the company, these areas represented approximately 4% of fiscal 2019’s unit closings.
Over the past five years, the company has invested approximately $1 billion on acquisitions. D.R. Horton’s well-stocked supply of land, plots and homes provide it with a strong competitive position to meet the demand in the coming quarters, in turn increasing sales and home closings.
At its current price of $53, the stock has cleared its key 200-day m.a. and should challenge $55 as minor resistance with a good shot at trading back to the pre-coronavirus high of $62.54. Our AI-driven Stock Forecast Toolbox shows the potential for D.R. Horton shares to trade up to $56.61 resistance in the very short-term.
Traders looking to get involved with D.R. Horton by way of trading the stock or options should be on the lookout for when I add DHI to our watch list of potential trades.
In our primary trading service Aggressive Power Trader, I direct our subscribers through the “trade decision-making process” with the mindset of being in and out of trades within 24-48 hours with the objective of booking 30%-60% gains against the amount of capital at risk on each and every trade with 75% accuracy.
The major element of this service is that it provides tomorrow’s featured trades the night before so traders can analyze and work on how they might best want to participate. You get to examine stock candidates well ahead of when I’m going to execute my best ideas the next day. It’s my TOP STOCK watch list of trading candidates with the various parameters that I use to trade each trade with defined risk levels, entry points and projected exit prices.
Each day at 8:00 PM and 8:30 AM CST, we provide our Top Bullish and Bearish Stocks, each with an Entry Point and projected exit price. Our signals are meant to last 1-2 days. Below are actual recommendations with parameters found on our Aggressive Power Trader Watch List.
I’m only showing a few stocks and ETFs and option that made up our Thursday night Watch List, so, there are plenty of trading opportunities in stocks, and ETFs to put to work on a daily basis. There are typically 10-12 trading strategies to consider.
I also post details of our trading activity and updates on the Watch List at the top section of our daily Action Alert email. So, make sure to stay tuned in that service as well.
Trading Thoughts: consider buying near the "BUY" level with a "10 days prediction" higher than the close price. In our live trading room. I usually hold a position for 1-2 days and allocate no more than 5% of trading capital to any single trade.
I allocate less than 5% of my portfolio if I hold a position overnight. On average, less than 1% of the portfolio should be at risk if you hold a position less than one day. I personally enter a position at predicted LOW (BUY) price or yesterday's close price. My stop loss is 1% and my target gain is 1% of a stock price. I target 75% accuracy using these signals.
Through the Aggressive Power Trader service, we tie our Tradespoon Live Trading Room to manage the parameters of every trade. And we update our closed positions daily. The two platforms work seamlessly to provide our subscribers with the most robust trading experience available anywhere in the market today.
For those that have followed since inception, a $100,000 initial investment when back tested may have grown to over $1.7 million dollars. This fantastic performance is made possible by being right on every 3 out of 4 trades with an average profit of 24.36% per trade.
Once you’ve become a member to Aggressive Power Trader, I highly encourage you to view the instructional videos on how to best use your membership and participate in live weekly strategy roundtable workshops that are archived in the event that they need to be viewed at a later time.
Our special introductory offer of $17 for the first 30 days should be your first trade of the week ahead. Volatility is a beautiful thing if one knows how to harness it. The trading landscape is fraught with uncertainty. Every major company has pulled guidance for 2020, so that just opens the door for extreme moves. This is where the power of AI takes over to navigate where the most opportune trades are and where we shine!
Trading thoughts on our trading model:
Within our Aggressive Power Trader trading stock watch list, trades are recommended in our Tradespoon Live Trading Room the next day.
Aggressive Power Trader is purposed to deliver high-visibility sector strength where a cluster of leading stocks are identified, coinciding with what we call a “10-day prediction momentum trade”. When we recommend a stock, ETF, or related option strategy, our time horizon is same-day in-and-out and up to five days max, at which time in the majority of trades, would be closed out.