Lennar is the No. 2 homebuilder by market cap (behind D.R. Horton ), and the most active in terms of average daily options . The company’s and revenue both beat estimates last week. Perhaps more importantly, management had the confidence to reinstitute guidance. That prompted several analysts to raise their price targets.
LEN is in an interesting place technically after rallying sharply between mid-March and mid-May. It’s been consolidating above its 200-day ( ) and today is trying to make a higher low along a trendline starting in early April. Meanwhile resistance has remained around $65.50, resulting in a .
LEN’s 50-day is also moving up toward its 200-day . That creates the potential for a “Golden Cross” within the next 10 sessions. It also had a outside candle on the weekly chart (not shown) last week – a potential sign of “animal spirits in the house.”
It’s usually a good idea to wait for breakouts, but the fundamental argument for homebuilders is strong. Traders may want to enter with last week’s low as risk management and consider adding on a breakout through resistance.