PulteGroup, Inc. (PHM)

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Stock Price History

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Our View

Pulte Group is the third largest home construction company in the US. It operates in 44 areas of construction across 23 states in the country. Home building is linked closely to the overall health of the economy. The company has had a good track record of sustaining high ROEs, high margins, and a low debt-to-equity ratio. It controls over 150,000 lots and is posed to grow long term once the economy recovers from the pandemic. Price area now looks good for the stock.

A snapshot of the 20 year monthly chart of PHM points to an almost decade-long uptrend that the stock has been in. The stock hit a high of 45 in February 2020 but has fallen about 50% since then. In March and April of 2020, the price broke the bottom of the long-term trend as well as an important support level at 23.

However, PHM has retraced back 50% from its April 2020 lows and is currently on track to re-test a resistance level at around 35 and then the top of the long-term trend at around 48. Stop loss can be placed below the support line somewhere around 21.

Positions taken at $30.72 with stop loss 33% below at $20.43.  Take profit point for short term traders at $45 yielding a profit of around 47%.