Toll Brothers has had a very rough go this year.  At last month’s low the stock had fallen nearly 35% from the January highs.  In late June TOL appeared to have reached a significant low as the 40 week moving average came into play.  As the month dragged on shares fell to new 2018 lows while putting in a sixth straight lower monthly low.  So far this month the stock is showing signs of stabilization.  TOL is working on a higher monthly low while tracing out a divergent MACD pattern.  In the near term we consider the stock a low risk buy near current levels. 

Trading notes:

TOL put in a major low in August of last year.  From the Aug. 22, 2017 lows the stock surged nearly 40% by the start of December.

The stock’s 40 week moving average($36.00)has proven to be quite heavy in the past(Q4 of 2017, Q4 of 2016).  A close back above this level would be very encouraging. 

TOL should be considered a low risk buy near current levels.  A close back below $34.00 would violate the July low indicating the 40 week moving average is continuing to apply pressure.

Earnings are due August 21.  The August earnings report last year marked a major bottom.

At time of publication we do not have a position in TOL.