Trading 5 Home Repair Stocks On Recovery From Hurricanes And Wildfires

In the wake of three home-damaging hurricanes and wildfires in California, the home repair activities will continue.

Armstrong World (AWI) provides ceilings and cabinets. Lennox International (LII) provides air conditioning and heating systems. Masco (MAS) provides home improvement and building products. Owens Corning (OC) makes insulation, roofing and siding products. Vulcan Materials (VMC) provides asphalt mix and concrete.

Armstrong World closed last week at $50.40 up 20.6% year to date and in bull market territory 36.6% above its post-election low of $36.90 set on Nov. 8.

Courtesy of MetaStock Xenith

The weekly chart for Armstrong World is negative with the stock below its five-week modified moving average of $51.09 and above its 200-week simple moving average of $44.61 last tested as the “reversion to the mean” during the week of July 29 when the average was $44.42. The 12x3x3 weekly slow stochastic reading declined to 76.62 last week down from 83.43 on Nov. 10 falling below the overbought threshold of 80.00.

Given this chart, my trading strategy is to buy weakness to my quarterly and semiannual value levels of $47.15 and $45.18, respectively, and reduce holdings on strength to my weekly and annual risky levels of $55.53 and $63.58, respectively.

Lennox closed last week at $194.25 up 26.8% year to date and in bull market territory 36.6% above its post-election low of $142.76 set on Nov. 10.

Courtesy of MetaStock Xenith

The weekly chart for Lennox is positive with the stock above its five-week modified moving average of $185.56 and above its 200-week simple moving average of $128.64. The 12x3x3 weekly slow stochastic reading rose to 74.34 last week up from 34.07 on Nov. 10.

Given this chart, my trading strategy is to buy weakness to my annual value level of $141.93, and reduce holdings on strength to my quarterly risky level of $202.62. My semiannual pivot is $193.69.

Masco closed last week at $39.36 up 24.5% year to date and in bull market territory 31% above its post-election low of $30.04 set on Nov. 9.

Courtesy of MetaStock Xenith

The weekly chart for Masco is neutral with the stock above its five-week modified moving average of $38.97. The 12x3x3 weekly slow stochastic reading declined to 68.89 last week down from 74.28 on Nov. 10.

Given this chart, my trading strategy is to buy weakness to my annual value level of $30.40, and reduce holdings on strength to my semiannual, monthly and quarterly risky levels of $40.62, $41.78 and $43.01, respectively.

Owens Corning closed last week at $85.63 up 66.01% year to date and in bull market territory 80.4% above its post-election low of $47.47 set on Nov. 11.

Courtesy of MetaStock Xenith

The weekly chart for Owens Corning is positive but overbought with the stock above its five-week modified moving average of $80.06 and above its 200-week simple moving average of $48.83, last tested as the “reversion to the mean” during the week of Jan. 9, 2015 when the average was $35.57. The 12x3x3 weekly slow stochastic reading rose to 92.62 last week up from 92.25 on Nov. 10 well above the overbought threshold of 80.00. The reading is above 90.00 which put the stock in a pattern called an “inflating parabolic bubble”.

Given this chart, my trading strategy is to buy weakness to my quarterly value level of $76.71, and reduce holdings on strength to my weekly risky level of $86.73.

Vulcan Materials closed last week at $123.04 down 1.7% year to date and up just 12.9% from its post-election low of $108.95 set on March 27. The stock is in correction territory 11% below its post-election high of $138.18 set on Nov. 10, 2016.

Courtesy of MetaStock Xenith

The weekly chart for Vulcan Materials is positive with the stock above its five-week modified moving average of $121.96. The 12x3x3 weekly slow stochastic reading rose to 69.90 last week up from 67.47 on Nov. 10.

Given this chart, my trading strategy is to buy weakness to the 200-day and 50-day simple moving averages of $121.81 and $119.96, respectively, and reduce holdings on strength to my quarterly and semiannual risky levels of $143.28 and $143.56, respectively.

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