Hubert Senters here.
Let’s take a look at DHI, D.R. Horton as you can see. It’s having on one bad day. Now, we do have a little bit of a consolidation that took place right in here as you can see well, I can’t draw. I’m losing my mind here. So a nice little triangle consolidation break down below that and our next place that we look like we can go right here and this support area is going to be like $36-ish.
So any time you see this stuff it is interesting when you see a nice big old red nasty candle to look at. You just want to make sure that you’re not going to get it you in a trap here. But you can notice that there has been some decent support and or resistance right here like this. Do a little drawing and there’s that little rectangle just playing a little ping pong which are notoriously hard to trade.
People think they’re simple but they’re actually really hard, you know, some short here and buy here, sell here, buy here, you know, going back and forth like that. Now, we have broken cleanly the bottom at $41.44. So now, our next target if you want to do a potential short on this bad boy here’s how I would handle that.
I think it’s going to go back down to the support area of $36. So you short it here like $40.58 right here at that lower right there, right in that area. Your stop-loss is going to have to be right in this area right here at $42.23. So you’re going to risk two bucks or so a little bit more than two bucks.
But your target is going to be $36. So the risk reward ratio is pretty much risk and one to make too now, as soon as it goes in your favor you can start ratcheting down that stop-loss.
Good luck. Hope it helps. And I’ll see you on the next video.