Stocks to Sell: PulteGroup (PHM)
Click to Enlarge Housing stocks were under pressure on Wednesday in the wake of a disappointing new home sales report: Sales dropped 14.5% sequentially in March to a 384,000 annual rate, well below the 455,000 consensus estimate. Prices are unsustainably high, with the median selling price up 11.2% to a record-high $290,000. On a year-over-year basis, sales are down 13.3% while prices are up 12.6%.
The specter of fewer sales and downward pressure on prices is bringing out the sellers in homebuilding stocks.
Among the vulnerable names is PulteGroup (PHM), which is falling out of a tight monthlong trading range on a notable increase in downside volume. I’ve recommended the May $19 puts to my Edge Letter Pro clients.
PHM reports earnings Thursday morning, which could spur more motion.