The USD 40.26 support, currently tested, should allow Meritage Homes Corp to rally again.

The company enjoys an excellent Surperformance rating which underlines the revenue growth, the earnings quality and the attractive valuation. The present consensus average target price is displaying a 10% upward potential. Furthermore, the P/E ratio for 2015 estimates is below the industry average.

The stock has been in an accumulation stage for several months within the USD 49.7/42 range. Near the lower limit, that acts as a support, the share finds the help of the rising 100-week MA currently at USD 42. Moreover, the RSI indicator shows an oversold situation.

Therefore, it seems opportune to take a long position on Meritage Homes Corp at current prices. A first target price could be the USD 45.7 resistance. Investors should not insist below the USD 42 and a stop-loss order should be placed under this threshold.