Ryland Group (NYSE:RYL) — Ryland is among the largest U.S. homebuilders and has an extensive mortgage operation. S&P sees Ryland “surviving the current downturn in the housing market,” but they also see prolonged weakness in the sector. The company is “cash poor” and at a disadvantage against its competition.
This stock was on our 6 Stocks to Sell in November list since the recent recovery to its bearish resistance line at $14 gives current holders an opportunity to recover some of their losses. But a further meaningful advance is unlikely especially with a double-top overhanging the current recovery.
Note the strong sell signal from the stochastic and what appears to be a close below the near-term support line at $13.75. KeyBanc downgraded RYL yesterday on valuation. Expect a sell-off to the next support zone at $10 to $11.