Homebuilder Beazer Homes (BZH) widely missed its earnings forecast on Friday (despite being recommended as a “Buy” by Standard & Poor’s). Beazer reported a 6.6% drop in new-home orders vs. one analyst’s estimate of a 7.5% increase. And Beazer reported a loss of 47 cents a share.
Technically the stock had been consolidating at just over $18 for more than a year. But last week’s earnings and sales failures plunged the stock through support, and BZH fell to a low of $15.27 before bouncing $0.91 on Friday. Technically BZH has broken down, and so it should be sold.
Traders may wish to consider BZH a short sale at $17 with a target of $12.50. A stop-loss order should be placed at $18.50. Short-selling is a speculative technique that is suitable only for those who qualify. Please consult with your broker as to the ability to borrow shares and any special margin or other requirements.