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Jul 10, 2023

Swing Trader Boasts 10.86% Yield in Sectors for LGIH

Impressive Performance by LGIH: Swing Trader Benefits from Diversified Sector Strategy

Diversified sector trading strategies have proven to be effective once again, with a Swing Trader operating across consumer, energy, and financial sectors generating an impressive 10.86% for LGIH (LGI Homes, Inc.). LGIH, a leading homebuilder in the United States, is currently in an upward trend that adds further evidence to the profitability of the diversified approach.

One of the interesting aspects of LGIH's recent performance is its breakout from the lower Bollinger Band on July 06, 2023. The Bollinger Band indicator is a useful tool for traders to identify potential buying and selling opportunities. When the price of a stock drops below its lower Bollinger Band, it could signify a potential price increase in the near future as the stock may be oversold.

For LGIH, this breakout from the lower Bollinger Band is particularly significant because it may indicate the stock is preparing for a rebound. The probability of LGIH's price rising further in the following month, given that it has broken its lower Bollinger Band, is a robust 85%. The data suggest that, in 28 of the previous 33 cases where LGIH's price broke its lower Bollinger Band, the stock's price rose in the subsequent month.

This upward trend might inspire traders to consider acquiring the stock or exploring call options. Call options, which give the holder the right (but not the obligation) to buy a stock at a predetermined price before a specific date, could be a strategic move for traders wanting to capitalize on LGIH's potential upward momentum.

What's particularly remarkable about this situation is the multi-sector approach the Swing Trader has employed. By diversifying investments across consumer, energy, and financial sectors, the Trader has not only maximized potential gains but also demonstrated the effectiveness of diversification in generating significant returns.

LGIH's impressive performance is a clear example of how a diversified sector strategy, combined with careful technical analysis using tools like the Bollinger Bands, can yield substantial benefits for traders. This case stands as a testament to the strength and potential profitability of Swing Trading when utilized correctly and strategically.

Related Ticker: LGIH

LGIH's Indicator enters downward trend

The Aroon Indicator for LGIH entered a downward trend on September 22, 2023. Tickeron's A.I.dvisor identified a pattern where the AroonDown red line was above 70 while the AroonUp green line was below 30 for three straight days. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options. A.I.dvisor looked at 129 similar instances where the Aroon Indicator formed such a pattern. In of the 129 cases the stock moved lower. This puts the odds of a downward move at .

Price Prediction Chart

Technical Analysis (Indicators)

Bearish Trend Analysis

The Momentum Indicator moved below the 0 level on September 13, 2023. You may want to consider selling the stock, shorting the stock, or exploring put options on LGIH as a result. In of 93 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .

The Moving Average Convergence Divergence Histogram (MACD) for LGIH turned negative on September 15, 2023. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 49 similar instances when the indicator turned negative. In of the 49 cases the stock turned lower in the days that followed. This puts the odds of success at .

Following a 3-day decline, the stock is projected to fall further. Considering past instances where LGIH declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

Bullish Trend Analysis

The RSI Indicator shows that the ticker has stayed in the oversold zone for 6 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an Uptrend is expected.

The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 11 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where LGIH advanced for three days, in of 318 cases, the price rose further within the following month. The odds of a continued upward trend are .

LGIH may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.

Fundamental Analysis (Ratings)

Fear & Greed

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 62, placing this stock slightly better than average.

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.351) is normal, around the industry mean (5.742). P/E Ratio (11.390) is within average values for comparable stocks, (82.984). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (1.524). LGIH has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.043). P/S Ratio (1.079) is also within normal values, averaging (71.793).

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating slightly weaker than average sales and a marginally profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. LGIH’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.

Notable companies

The most notable companies in this group are DR Horton (NYSE:DHI), Lennar Corp (NYSE:LEN), Pultegroup (NYSE:PHM), KB Home (NYSE:KBH).

Industry description

Homebuilding includes companies residential home construction companies, renovators and repair firms. The companies may be building single-family or multifamily homes, condominiums or mobile homes. Over the five years to 2019, the Home Builders industry is estimated to have grown at an annualized rate of 2.5% to reach $89.4 billion, (including expected growth of 2.6% in 2019), according to a study by IbisWorld. After having suffered one of its worst crises a decade ago during the last macroeconomic recession–which had much of its origins in U.S. real estate – the homebuilding industry has been recovering steadily so far. Higher disposable incomes and improving economic activity have bolstered consumers’ purchases of homes. While revenue of the Home Builders industry remains well below its prerecession high, demand growth estimates show promise.

Market Cap

The average market capitalization across the Homebuilding Industry is 5.11B. The market cap for tickers in the group ranges from 66.68K to 36.59B. DHI holds the highest valuation in this group at 36.59B. The lowest valued company is ASCK at 66.68K.

High and low price notable news

The average weekly price growth across all stocks in the Homebuilding Industry was -1%. For the same Industry, the average monthly price growth was -6%, and the average quarterly price growth was 8%. UHG experienced the highest price growth at 6%, while STHI experienced the biggest fall at -17%.

Volume

The average weekly volume growth across all stocks in the Homebuilding Industry was -40%. For the same stocks of the Industry, the average monthly volume growth was -14% and the average quarterly volume growth was -30%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 36
P/E Growth Rating: 41
Price Growth Rating: 50
SMR Rating: 53
Profit Risk Rating: 61
Seasonality Score: -16 (-100 ... +100)
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A.I.Advisor
published price charts
A.I. Advisor
published General Information

General Information

a provider of residential construction services

Industry Homebuilding

Profile
Fundamentals
Details
Industry
Homebuilding
Address
1450 Lake Robbins Drive
Phone
+1 281 362-8998
Employees
952
Web
https://www.lgihomes.com
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LGIH and

Correlation & Price change

A.I.dvisor indicates that over the last year, LGIH has been closely correlated with KBH. These tickers have moved in lockstep 85% of the time. This A.I.-generated data suggests there is a high statistical probability that if LGIH jumps, then KBH could also see price increases.

1D
1W
1M
1Q
6M
1Y
5Y
Ticker /
NAME
Correlation
To LGIH
1D Price
Change %
LGIH100%
+1.60%
KBH - LGIH
85%
Closely correlated
+2.14%
LEN - LGIH
83%
Closely correlated
+2.24%
MTH - LGIH
83%
Closely correlated
+1.93%
TMHC - LGIH
83%
Closely correlated
+1.79%
DHI - LGIH
82%
Closely correlated
+1.78%
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