Chart of the Day: Is Our Homebuilder Play at the Bottom?
We think the stock is washed out here and is ready to start moving higher.
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For months the chart of Builders FirstSource (BLDR) has been dragged along the bottom, scraping and trying to hang onto established levels of support. Those number are roughly $72 to $76, which had been important levels way back in 2022. Now, as we assess the daily chart there is no question the stock shows bearish qualities. MACD, though, has just turned up and so has stochastics (momentum), so there are some green shoots appearing.
But before we get too enthused, we have to respect the top of the chart, which is still pink/purple, reflecting bearishness on the GoNoGo composite of indicators. In true fashion, this indicator tells the viewer to be cautious about buying and tread carefully. Seeing as though our objective is long term, we decided to add a small slice of BLDR last week after a long stretch of base-building, which may not be finished.
However, the levels talked about earlier have held firm, so we wait for the breakout to occur at some point. Patience can pay off nicely here, since the stock was up near $230 back in 2024.
We like Builders FirstSource in TheStreet Pro Portfolio and rate it a two, stockpile on pullbacks.
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At the time of publication, TheStreet Pro Portfolio was long BLDR.
