Momentum Building for Lennar Corp.
August 22nd, 2024
Momentum Building for Lennar Corp.
Did you notice homebuilding stocks surging? I did! For today’s Trade of the Day e-letter we will be looking at a Moving Average Convergence/ Divergence (MACD) chart for Lennar Corp. stock symbol: LEN.
Lennar Corporation is engaged in homebuilding and financial services in the United States. The company’s reportable segments consist of Homebuilding, Lennar Financial Services, Rialto and Lennar Multifamily. Despite the varied product portfolio, homebuilding remains Lennar’s core business.
The LEN daily price chart below shows that LEN is in a price uptrend as the 24/52 day MACD line (black line) is above the 18-Day EMA (purple line). The Moving Average Convergence/ Divergence chart is shown below the daily price chart.
LEN Prime to Buy
As long as the 24/52 Day MACD line remains above the 18-Day EMA, the stock is more likely to keep trading at new highs in the coming days and weeks. Since LEN’s bullish run is likely to continue, the stock should be purchased.
Since LEN’s 24/52 Day MACD is trading above the 18-Day EMA and will likely rally from here, let’s use the Hughes Optioneering calculator to look at the potential returns for a LEN call option spread.
The analysis reveals that if LEN stock is flat or up at all at expiration the spread will realize a 66.7% return (circled) and if LEN stock decreases 7.5% at option expiration, the option spread would make a 66.7% return (circled).
Option spread trades can result in a higher percentage of winning trades compared to a directional option trade if you can profit when the underlying stock/ETF is up, down or flat.
A higher percentage of winning trades can give you the discipline needed to become a successful trader.
The Hughes Optioneering Team is here to help you identify profit opportunities just like this one.
*Trading incurs risk and some people lose money trading.