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Why More Downside Could Be In Store For TRI Pointe Homes (TPH)

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TRI Pointe Homes, Inc. designs, constructs, and sells single-family homes and condominiums. It operates through the Homebuilding and Financial Services segments.

Take a look at the 3-month chart of Tri Pointe (NYSE: TPH) below with the added notations:

Chart of TPH provided by TradingView

Since its beginning of the year peak, TPH seems to have formed a clear, trend line of resistance (yellow). The line of resistance is currently sitting around $17.50, and a break above that line might lead to higher prices, overall, for the stock.

The Tale of the Tape: TPH has a down trending resistance. A break above that resistance could result in higher prices for the stock, thus a long trade could be made with a protective stop set below the entry price.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key…

Good luck!

Christian Tharp, CMT

ATTENTION READERS!

Do NOT trade options until you watch this video:

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Christian Tharp

I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group. My Chartered Market Technician (CMT) designation substantiates me as an expert in areas such as the technical analysis of stock trends, market indicators, cycles, price patterns, Elliot Wave principles, Candlestick charting, analyzing financial trends and behaviors, portfolio strategies, and forecasting future price movements. With my straightforward approach to simple, systematic trading, students learn how to strategically assess buy signals and market entry timing, establishment and management of stop losses, and how to employ a simple and disciplined trading approach that creates profits.

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