Technical Olympic USA (TOA)

Company

"TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums. We offer homes to “first-time” homebuyers, “move-up” homebuyers, transplants to a new city, buyers of vacation and second homes, and “empty nesters” looking for an active community lifestyle. We market our homes under leading local brand names including Engle Homes, Newmark Homes, Fedrick, Harris Estate Homes, and Trophy Homes." (company website)

TOA 3-month stock chart

Buy

Technical Olympic has been testing the $10 level since arresting a long downtrend last fall. This month it moved pretty decisively above that level with some decent volume, pushing buying pressure (+DI) above selling pressure. At the same time, there are some troublesome signs in the chart, so TOA bears close watching. Accordingly I've set my stop a bit higher than normal.

  • Price momentum (PPO) — dramatic improvement over past three months
  • Trend (ADX) — begun to strengthen again and buying pressure (+DI) is above selling pressure (-DI)
  • Money flow (CMF) — positive trend, and there is now an inflow
  • Relative strength (RSI) — strengthening gradually
  • Volume — falling, which is worrisome
TOA 2-month chart TOA 2-month chart

Based on technical analysis, MarketEdge calls TOA a "strong buy" in a "weak upward trend."

Sell

loss Bottom line
-5%

Since I bought TOA it has sputtered along around the $10 level, but today it broke down, piercing the trendline and the 50-day moving average. My stop-loss order kicked in and I suffered a modest loss.