KBH - constructive bull flag

As the S&P rockets back into its bear flag trading range catching me (and possibly many others) off guard and setting up for a continuation to the top of the channel somewhere near 1400+, the bull flag in KBH is looking interesting from a swing long perspective.

The first chart below shows KBH in a long primary bear trend (see big red arrow)...so it is prudent to start off this analysis by saying buyer beware. But if you look at the activity of the stock when it is over its 200day moving average (yellow line) as shown by the small green arrows, then you can see the intermediate and short term bull trend within that primary bear trend provides opportunities to play as a swing long.

The second chart above shows the action over the past year or so. Here it is easier to see how KBH has made higher highs. Most recently the stock has moved over its 200day average and is in the midst of a constructive bull flag. For those of you who like swing trades, this one sets up nicely for a buy in the $9.20 - 9.50 area or depending on your risk tolerance, on a break over the top of the bull flag channel currently near $10. Stops should be below the 200day moving average and the price projection on a break over the bull flag is at a minimum to the top of the flag near 10.80...a nice percentage gain.