Market Confusion: How to find floor stocks before recoil | Chart watch

Not everyone likes to take the opposite position. Most people prefer to move with the market without opposing the market. But for those who thrive to fight grains, extreme market movements offer opportunities.

Wednesday morning was one of the sessions. The Consumer Price Index (CPI) report is hotter than expected, and later the market has been initial plunge before the transaction is mixed. This offered an ideal opportunity to hunt stocks that could be the bottom.

My first movement was to check Stockcharts. Generator and pioneer My tool dashboard Real -time picture of market activities.

Figure. View ADVANCERS & DECLINERS Tools. The most difficult popularity was real estate and utility.

The real estate and utility divisions were the most influential at the beginning of the trading day. The second angle was needed to see the act of the sector. So I Sectoral summary equipment.

Figure 2. Summary tool. In terms of ratio, real estate was the most lost at the time of viewing.

After I decided to focus on the real estate sector, I was weak. New 52 week minimum Scan to see what I can find.

Figure 3. Images of scan pages and results. We found two housing construction stocks of DHI and LEN.

Dr Horton Inc. (DHI) and Lennar Corp. Two of the largest constructors of the United States (LEN) were creating a new 52 -week low.

Complete transparency: If you find the Super Low SCTR score, we create a new 52 -week low. And I’m not only good at prices, but I’m looking for a floor in terms of turnaround of EXTREME. Technical weakness.

But how was they compared to industry colleagues? I changed to analyze relative performance Perfcharts Add to get a comparison view SPDR S & P homebuilders ETF (XHB) In addition to the third major housing builders, industrial agents-Toll Brothers, Inc. (tol). TOL was not on the list, but despite the decline, it was included in the comparison as one of the major housing builders who showed relative intensity..

Figure 4. Perfchart compares XHB, DHI, LEN and TOL. TOL is the only stock that surpasses industry colleagues.

TOL is the only stock that surpasses colleagues by Ren and DHI leading XHB.

Going back to my goal, I am looking for stocks that may be close to the floor in the industry. But before doing so, I need to evaluate whether the industry can be the bottom, and I need to evaluate whether the current market response to the newly released CPI can be excessively expanded or justified by the default evaluation.

Below is a 5 -year week chart XHB.

Figure. The weekly chart of XHB. The index occupies the top, but will it pop out or continue to fall?

In contrast to the relative robbery index, the price of XHB from 2024 to October (RSI) If you decrease over 70 thresholds, the weak difference is clear and checks the toppings of the XHB. RSI is less than 50 lines, but not near the ADTRICTOLD territory.

Looking at the width of the division, real estate strength percentage index (BPI) currently prefers Bulls, because more than 50% of stocks in this sector are causing Point & Figure “BUY” signal. It doesn’t seem to seem to participate in this rally, but will the wider sector will eventually help to release the industry (that is, the housing constructor changes the bottom)?

The important level to see here is $ 97 ~ $ 101 (see Blue Highlights), the lowest in two swings that need to serve as a technical support. We overted the Ichimoku Cloud to expand the executable support range.. If the XHB has a low swing or falls down the cloud, there are many disadvantages. If you pop out, optimistic cases can be formed.

In mind, take a look at three shares (tols, len and DHI) side by side.

Figure 6. Tol, Len and DHI ACP chart. TOL, a better stock with better performance, is close to important support levels.

The blue horizontal lines of each chart show the latest swing low, and all of this is an important support level. Tol is trying to test that level, while Len and DHI have already fallen below it.

There is a daily chart Toll.

Figure 7. TOL’s daily chart. Watch how the price reacts to these two support levels.

TOL is supported by the low swing on December 120. If you look closely at the RSI, even though TOL is deep for a while before the TOL is prepared, the indicators rise in the 30 line and have some optimism. Meanwhile, Chaikin Money Flow (CMF) has fallen into negative territory. But this dip is less noticeable than December, when the price of toll can be the bottom.

If TOL is finished at less than $ 120, the more important support level is $ 110. This is the level of long -term support shown on the weekly chart. If the toL is maintained above this threshold value and progresses, the floor may be in place. Check the volume and momentum to check the reversal if a reversal occurs.

Next, take a look at this daily chart DHI.

Figure 8. DHI’s daily chart. The measured movement approach is used to determine the location where support can be found before the next swing is low.

The weekly chart in Figure 6 shows that the DHI is lower than critical support and is still falling. The next major support level is $ 100 in October 2023. However, if each swing is almost symmetrical, the DHI is expected to pop out of the “measured movement” level near the $ 118 range.

The CMF is much lower than the zero line, indicating that sales pressure leads to a decrease in stocks. However, RSI presents optimistic radiation, and even if stocks continue to fall, the recent lows have increased. Nevertheless, there is no clear confirmation that the floor is in place without the change of the decisive bounce and the CMF.

Finally, let’s switch to every day chart Ren’s.

Figure 9. In the short term, there is no invisible support.

LEN’s next level can be $ 101 in November 2023. However, in the short term, it seems that it is not noticeable to prevent Ren’s descent. In other words, some volume -based signals may not be entirely one -time sales pressure.

• Accumulation/distribution line (ADL) has shown that it rises from the current price (see green line). Opening mark for Ren.
• According to CMF, the amount of sales pressure is quite relaxed.
• Money flow index Tracing volume and momentum (MFI), even if Ren continues to decrease, indicates optimistic divergence.

There is no sign of the floor, but you can continue to monitor stocks for stabilization signs.

Nearby

This work shows an attempt to discover the lowest opportunity in market sales on Wednesday. I found the Stockcharts Tools, ie Advancers & Decliners and Sector Summary, to track the performance of the sector as one of the most difficult areas. The new 52 -week minimum scan LEN and DHI uses Perfchart to compare the relative strength to TOL. This stock has not yet confirmed the floor There is a hint of change.

It is worth adding LEN, DHI and TOL Chart And they are watching them. Once stabilized and the bottom is, you can indicate an initial entry point before the next upward trend is formed.

disclaimer: This blog is used only for educational purposes and should not be interpreted as fiscal advice. You should not use ideas and strategies without evaluating your personal and financial situations first or consulting financial experts.