On June 28, we mentioned that Lennar Corp. (NYSE:LEN) broke below the neckline of a well-formed head and shoulders pattern. We noted that the homebuilder companies were struggling and that the bearish price pattern was an obstacle that would prevent a move higher. As you can see from the chart below, the bears have dominated the price action since the break below the neckline and the price has dropped significantly.
The reason we've chosen to cover this stock again is because the price is currently testing the influential support of the $25 level (white line). The bulls will want to prevent a drop below this important support level because a close below would signal a prolonged move toward the next major area of support, which is found near the $17 mark (red line).