With little on offer with regard to quality or enduring trends in this decimated market and with a full tank of fear driving it we all need to be a bit patient until this phase subsides and when it does it will clear away the shrouds of despair and before us will open a wealth of riches in the form of quality undervalued stocks ready to rumble. When? Good question. What we need is a turn in sentiment before we can expect any rallies of confidence for us to jump on so we will just keep chipping away when the signs appear and just as we scaled out of the final phases of the bull market we will scale into the early stages of a new bull market as trends emerge and confidence returns. TOL provides our vehicle of example today, who, along with quite a few stocks, has suddenly come up on our stock radar for further assessment.

What do we look for that detects the early stage of a swing from the seller dominated supply profile defined by down trends, to one of a buyer dominated demand profile and up trends, and at what stage is that change confirmed?

Firstly TOL has hit a Key Low at $5.00 with a $65% correction to its recorded high at $13.88 post split. At this point the chances of a reversal increases considerably without yet making a call to action so we spend this time building our case by overlaying our template of success and ticking all the boxes until the odds are comfortably in our corner for a qualified reversal. Big buying support has come for TOL at a Key Low support level at $5.00 as indicated by the sharply rising volume levels. TOL clearly has plenty of firepower under the share price now as this heavy buying quickly stops a plummeting share price and forces a big jump last week on enormous volume. Now we start a simple process of evaluation to monitor and asses the unfolding price action and volume behavior which of course must continue on in this bullish manner by satisfying certain preset criteria. If this occurs we simply identify a reversal “trigger” point that has the high odds potential to unleash a further rally. This again will be at a predefined level and in the case of TOL it is at $6.75. Any breakout by TOL above that level, or by any other stock, must be confirmed by Stockradars sentiment measuring tool, the Trend Intensity indicator, and achieve a rating of 4 or greater, on a scale of -10 to 10, to qualify as a stock with compelling trending attributes and in turn Stock Pick status.  On a weekly basis we update and report on each of our covered stocks with regard to reversal or stop level and Trend Intensity rating with our Sunday release of the Stock Pick and Trend Intensity Report.