Shares of KB Home (KBH) are rising today ahead of earnings (after the bell). The stock has had a meteoric rise from the March 2020 lows of under $10.00/share, now trading at $40.50. Investors should be fully aware that there is a KB Home stock chart double top sell signal here. The homebuilder has recovered to its highs from February 2020 (before COVID-19) hit.
With earnings today, this sell signal speaks to a likely pullback in the coming days. While the housing market is hot because of low inventory, lumber prices are skyrocketed and overall building costs have gone higher. The profit margins will get squeezed for these homebuilder stocks like KB Home. Based on the technical chart, look for a pullback to $28.65 in the coming weeks/months. This is a solid short setup into the year-end.
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