The four charts below represent this weakness quite nicely. In fact each one, Lennar (LEN), KB Homes (KBH), D.R. Horton (DHI), and Pulte Homes (PHM) all show bearish price patterns at their peaks that indicate to me, at the very least, a pullback is in order.
Right now is probably the best time to short them if you are worried about keeping the risk tight on the trade, however, if we get downside follow through tomorrow, it would probably represent a better time 'technically' to get short on the home builders.
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Ryan (@shareplanner) specializes in swing trading strategies and is the founder of SharePlanner which he created to help and teach others on how to trade stocks better using multiple approaches and time frames. Each day you can count on Ryan to provide his trading advice as well as transparency in every trade that he makes. Ryan Mallory resides in Central Florida. More >>