DailyPlay – Opening Trade (DHI) – June 10, 2024

DHI Bearish Opening Trade Signal

Investment Rationale

As homebuilder weakness continues, DHI is at risk of a major breakdown below its key $140 support that has held since Dec 2023. If we break below this level, targets are in the low $120’s. With it’s recent underperformance relative to its sector and market, suggests that weakness is ahead. 

DHI – Daily

Trade Details

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish Debit Spread

Details: Buy to Open 7 Contracts July 5th $140/$130 Put Vertical Spreads @ $2.97 Debit per Contract.

Total Risk: This trade has a max risk of $2,079 (7 Contracts x $297) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $297 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is trending lower.

1M/6M Trends: Bearish/Mildly Bearish

Relative Strength: 4/10

OptionsPlay Score: 133

Stop Loss: @ $1.49 Credit. (50% loss of premium paid)

View DHI Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

Please note that these prices are based on Wednesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View DHI Trade