When considering what names to put on your watch list, look for stocks with an 80 or higher RS Rating. LGI Homes stock now meets that criteria, with an increase from 65 to 85 Friday.
As you try to find the best stocks to buy and watch, keep a close on eye on relative price strength.
IBD's proprietary rating measures market leadership with a 1 (worst) to 99 (best) score. The grade shows how a stock's price performance over the trailing 52 weeks compares to all the other stocks in our database.
Over 100 years of market history reveals that the best-performing stocks often have an RS Rating of over 80 as they launch their biggest price moves.
See How IBD Helps You Make More Money In Stocks
Is LGI Homes Stock A Buy?
LGI Homes stock broke out earlier, but has fallen back below the prior 103.78 entry from a cup with handle. If a stock you're tracking breaks past a buy point then falls 7% or more below the original entry price, it's considered a failed base. It's best to wait for the stock to form a new consolidation and breakout. Also keep in mind that the most recent consolidation is a later-stage base, which makes it riskier to establish a new position or add shares to an existing one.
The homebuilder reported negative growth for both the top and bottom lines last quarter.
LGI Homes stock earns the No. 15 rank among its peers in the Building-Residential/Commercial industry group. KB Home and Meritage Homes are also among the group's highest-rated stocks. For more industry news, check out "Homebuilder Stocks To Watch And Real Estate Industry News."
