Chart of the Day: This Holding Is Making a Run Higher on Continued Strength
The stock is pushing highs from earlier this year.
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After a sharp move down during the summer we have seen Builders FirstSource BLDR come roaring back with a textbook pattern of higher highs and higher lows. This stock remains a buy on the GoNoGo composite of indicators, but may be running into a bit of trouble at those April highs.
It was then that the stock plunged on heavy volume, shifting into a full-fledged downtrend on pretty heavy turnover. Builders FirstSource shed some 40% of its value in about two months, but did an about face starting in July and has regained all that was lost.
While there was a mild pullback this week (arrow to the right of the chart) the damage was contained. Only a very mild pullback on lower volume, which would make the bulls breathe a sigh of relief.
It's been a nice run higher and perhaps after a bit of sideways action we could see BLDR make a new leg up. Money flow is not spectacular, while MACD (moving average convergence divergence) is down but that is only because momentum is slowing down (sideways rather than down); we see that in stochastics as well.
After a strong run for a few months, there's nothing wrong with a bit of sideways action, as long as price holds in. That is what we are seeing this month.
We like Builders FirstSource and rate it a One in TheStreet Pro Portfolio.
At the time of publication, TheStreet Pro Portfolio was long BLDR.
