D.R. Horton $DHI Bottom Feeding On Future Fed Policy Softening Hopes

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Some deep pocketed institutional investors are bottom-feeding in rate sensitive stocks like D.R. Horton $DHI on rumors that the Federal Reserve is considering softening its rate hike policy. On October 21, 2022, we saw large dark pool trades and substantial call option trades.

Dark Pool Trading In D.R. Horton $DHI Stock

An analysis of the dark pool trading data suggests the trades off the dark pool were buying because of how $DHI stock rose following the trades being made public.

DR Horton stock chart on October 23, 2022, with dark pool trades in orange bars. A table to the right gives details of the dark pool trades with the text TIME SYMBOL MESSAGE PRICE 1:49:47 DHI 112,485 DARK AVG PRC $7.8M 3.31% AvgVol $69.75 11:24:31 DHI 142,050 DARK BLOCK $9.7M 4.18% AvgVol $68.80 7:10:03 DHI 100,000 DARK BLOCK $6.8M 2.94% AvgVol $68.50 7:10:03 DHI Unusual Dark Pool Activity $68.50

On the same day, October 21, 2022, that we had dark pool buying, we also had a huge $1 million valued call option sweep order.

Bullish Option Flow in DR Horton $DHI Stock

DR Horton stock options flow on October 21, 2022, with the text TIME SYMBOL EXP STRIKE C/P SPOT DETAILS TYPE VALUE 12:58:14 DHI 11/04/22 68 PUT 69.70 200@1.75_A BLOCK $35K 10:49:59 DHI 11/18/22 775 CALL 68.61 373@0.9_A BLOCK S33.6K 10:0151 DHI 11/18/22 725 CALL 6833 4800@2.15_A SWEEP S1.03M 10:0039 DHI 11/18/22 725 CALL 68.26 200@2.1_A SWEEP $42K 7:36:34 DHI 11/04/22 68 PUT 67.11 250@2.85_A BLOCK $713K 7:32:37 DHI 11/04/22 68 PUT 6755 150@2.65 A BLOCK S39.8K

In particular, a large sweep call option valued at $1.03 million for the November 18, 2022, $72.50 call hit the tape in morning trading on October 21, 2022.

DR Horton bar chart on October 21, 2022, of large volume in orange bar in the November 18, 2022, $72.50 call option contract.

D.R. Horton downgraded to Outperform from Strong Buy at Raymond James

On October 21, 2022, Raymond James analyst Buck Horne downgraded D.R. Horton to Outperform from Strong Buy with a price target of $77, down from $103. Horne has a more cautious outlook on the housing market as mortgage rates have driven down affordability to unprecedented levels. Horne said that D.R. Horton is the industry’s most cost-efficient producer of single-family housing.

D.R. Horton price target lowered at Wedbush

On October 10, 2022, Wedbush analyst Jay McCanless lowered his price target on D.R. Horton to $83 from $97 but kept an Outperform rating on the shares. McCanless said that the combination of mortgage rate buydowns and weaker demand are likely to lead to lower earnings over the next four quarters. McCanless expects positive demand to return in the first half of 2023, assuming the current demand pause is like 2018 and 2019.

Three Stock Lunch: Pfizer, DR Horton and WestRock

DR Horton $DHI Stock Technical Analysis

DR Horton $DHI stock is in a technical strong downtrend. Long-term indicators suggest a continuation of the downtrend. However, short-term indicators suggest $DHI stock is approaching oversold territory so a bounce or trend reversal is possible.

DR Horton stock chart on October 23, 2022, in a downtrend channel pattern with a neutral MACD and neutral money flow.
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