Revisit the buy and-hold case for Hovnanian Enterprises, Inc. (HOV)

Hovnanian Enterprises, Inc. (NYSE:HOV) fell by -6.19% in Monday’s trading session from $1.94 to $1.82 and has now fallen 3 consecutive sessions. The price has fallen in 8 of the last 10 days and is down by -18.75% over the same course of time. Volume has increased in Monday’s trading session by 1.40 million shares, but on a weak note. This is may be an early warning and the risk will be increased slightly for the next couple of days. In total, 2.58 M shares exchanged hands for about $4.70 million.

Inside HOV’s Recent Trend

Hovnanian Enterprises, Inc. (HOV) lies in the lower of a very wide and falling trend in the short term, and this will normally pose a very good buying opportunity. A break down through the resistance trend line at $1.77 will initially point to a quick declining speed. Short-term traders are anticipated to see a retreat of -13.23% over the course of a quarter and, with 90% chance the price will be floating in the range of $1.54 and $2.37 in this timeframe.

Hovnanian Enterprises, Inc. Technical Signals

HOV has witnessed its long term and short term MA triggering a sell signal. Many traders watch for long-term averages to cross above short-term averages to signal the beginning of a downtrend. Upon corrections, the price will meet resistance from the averages between $1.97 and $2.27. A buy signal will be generated if it crosses above any of these levels. Its pivot point high generated sell signal on Thursday August 24, 2017, which calls for additional declines until the stock forms a new pivot point low, as this could be a buying opportunity. Volume up and price depreciating is getting our attention as this movement is seen as bearish sign.

Hovnanian Enterprises, Inc. (NYSE:HOV) Support And Resistance Levels

There is no support from accumulated volume below today’s level and given the right condition the stock may perform very badly in the next couple of days. In case of gains, the next resistance from accumulated volume will be at $2.13, $2.25 and $2.27.

Hovnanian Enterprises, Inc. (HOV) Risk Assessment

A volatility based measure Bollinger Bands suggests this stock poses high risk. In the most recent session, the stock price hovered around $0.20 between high and low, or 11.17%. The average volatility for the past week stood at 6.16%.

Hovnanian Enterprises Inc is in oversold territory based on Relative Strength Index reading (22). In some cases it takes more time for the trend to shift while the stock is being oversold and the Relative Strength Index keeps moving.


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