Home construction stock PulteGroup Inc Inc (NYSE:PHM) is pulling back alongside the broader market, last seen down 0.9% to trade at $119.58. The security still sports a 16.2% six-month lead, though, while the $115 level has acted as support since October. What's more, a long-term bullish trendline looks ready to push shares back up toward this year's peak around $142.
More specifically, PHM has pulled back to its 320-day moving average. Per Schaeffer's Senior Quantitative Analyst Rocky White, the stock is within 0.75 of the trendline's 20-day average true range (ATR), after remaining above it 80% of the time in the past two weeks and 42 trading days. This signal has happened six other times during the last 10 years, after which the security was higher a month later 50% of the time with an average 3.5% gain. A move of similar magnitude would put PHM back above $123.
Options traders have been much more bearish than usual toward PulteGroup stock, per its 50-day put/call volume ratio of 1.67 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks higher than 93% of readings from the past year. An unwinding of this pessimism could generate tailwinds for PHM.
Options are affordably priced at the moment, too, making this an excellent time to weigh in on the equity's next moves. This is per PHM's Schaeffer's Volatility Index (SVI) of 37%, which sits in the 20th percentile of annual readings.
