With the NFL Playoffs getting underway this weekend (Go Bills!), it’s time we put the offense on the field!
I was kicking around a bullish idea in a consumer staples name during our Analyst meeting today. The chart looks great. The setup is good. We can position for a nice potential reward versus the risk we’d incur to put the trade on. Everyone agreed that its probably a good trade.
But… is it aggressive enough?
Answer: No, it’s not.
The thinking that emerged from our chat was that risk is back on in the stock market; therefore, we need to get into the most reasonably aggressive names we can. And one of the areas where risk is most definitely “on” is in the homebuilders sector.
If all we did was watch the evening news or listen to the inflation and interest rate scaremongers, we’d reasonably conclude that a long-term and painful bear market for real estate and housing in particular is a slam dunk. No contest.
If a severe real estate bear market was in the cards, would we be seeing homebuilders ripping of their recent lows the way we have over the past couple of months?
Check out this chart of Toll Brothers $TOL: [Read more…]