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Home Builder Stocks Like $TOL Show Concerning Signals

Scan through charts of home builders like Toll Brothers Inc (NYSE:TOL) and KB Home (NYSE:KBH) and you will see they have stalled out over the last two weeks. Home building data has started to weaken after home price spikes kept buyers on the sidelines. This may explain why most of the home builder stocks have started to form bear flags. Bear flags signal a down move coming in the near-term. While I do not see a drastic correction in the home builder stocks near-term, the bear flags do signal a drop coming, likely 5-10%. Investors should be aware and potential look to profit from this drop in the next few weeks.