NYSE:HOMB may be ready to breakout.

Our stock screener has spotted HOME BANCSHARES INC (NYSE:HOMB) as a possible breakout candidate. A technical breakout setup pattern occurs when the stock is consolidating after a nice uptrend. Whether the actual breakout occurs remains to be seen of course, but it may be interesting to keep an eye on NYSE:HOMB.

Technical Analysis Observations

ChartMill assigns a proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.

We assign a technical rating of 8 out of 10 to HOMB. This is due to a decent performance in both the short and medium term time frames. Compared to the overall market, HOMB is only an average performer.

• The long and short term trends are both positive. This is looking good!
• HOMB is currently trading in the upper part of its 52 week range. The market is still in the middle of its 52 week range, so HOMB slightly outperforms the market at the moment.
• In the last month HOMB has a been trading in the 24.14 - 26.20 range, which is quite wide. It is currently trading in the middle of this range where prices have been consolidating recently, this may present a good entry opportunity, but some resistance may be present above.
• Looking at the yearly performance, HOMB did better than 84% of all other stocks. However, this overall good ranking is mostly due to the recent strong move.
• HOMB is an average performer in the Banks industry, it outperforms 62% of 317 stocks in the same industry.

Looking at the Setup

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NYSE:HOMB currently has a 9 as setup rating:

Besides having an excellent technical rating, HOMB also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 25.78. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 25.15, a Stop Loss order could be placed below this zone. Another positive sign is the recent Pocket Pivot signal.

Trading breakout setups.

For a potential trade one would typically wait until the stock breaks out of the consolidation zone to enter the stock and it could be sold again for a loss when it would fall back below the zone.

This article should in no way be interpreted as trading advice. You should always make your own analysis and trade or not trade based on your own observations and style. The article is based purely on some technical observations.

More breakout setups can be found in our Breakout analyzer.