From a distance, it may seem as though the selloff in Toll Brothers has no end in sight. If you zoom out however, I see this area as being a spot that is easy to manage risk, while providing ample upside reward. We can see that price is coming into an area of major support going back five years. Lots of shares have changed hands here and knowing the housing market has been fundamentally strong I would hesitate to bet against TOL at these levels.

 

 

Zooming into the daily we can see the bulls trying to defend as evidenced by the long lower shadow on the candle today. This is another tip off that sellers are tired and the longs are defending this price level.

 

I took a starter in August 38 calls here.

Back with more soon.

OC