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Don’t Buy This Texas Homebuilder That’s Set to Drop 20%

Don’t Buy This Texas Homebuilder That’s Set to Drop 20%

LGI Homes (Nasdaq: LGIH) shares broke below a key technical support yesterday. The Texas-based affordable home builder is now set to plunge even lower. While the company crushed earnings expectations, the stock sold off due to worries over rising interest rates. An affordable home builder like LGI Homes needs lower interest rates to keep homes affordable. After failing to increase guidance for the year after such a strong quarter, investors pushed the stock below its key support level of $62.50. It also broke below its 200-day moving average. With these key levels taken out, the stock is set to plunge another 20% from here over the coming weeks.

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