The Ryland Group, Inc. and subsidiaries consist of two business segments: homebuilding and financial services.For the 9 months ended 9/30/00, revenues increased 12% to $1.58B. Net income applicable to Common increased 11% to $50.2M. Revenues reflect an increase in the number of closings and a higher average closing price. Net income waspartially offset by increased S/G/A expenses due to a increased incentive compensation expense.

January 4, 2001

The Ryland Group (RYL) specializes in on-site construction of single-family homes and condominiums. The company also provides mortgage related products and services to retail customers through its subsidiary, Ryland Mortgage Company. Most recently, the company has been repurchasing stock in an effort to improve its long-term prospects and to enhance shareholder value. Even more appealing, though, is the stock’s recent breakout. Today’s advance broke into new territory and set a new all-time high of $44, which is why we’re picking up RYL as a momentum play. A closer look at the chart will show that the stock has a tendency to advance sharply higher when shares break into new territory. Furthermore, strong volume of 495,900 shares traded confirms the breakout pattern. With this in mind, we believe that RYL could be on route to test the $45 mark. However, to reach this level the stock will initially need to break above near-term resistance at $44. Should this occur, we’ll look for stiffer opposition to come at the $50 mark. We’ll look for entry points when RYL can advance through resistance on good volume of 245,000 shares. As for support, look for RYL to have an initial base near $42. Secondary support should come at the 5-dma of $40.87, with additional support at the $40 mark. Look for entries when mid-day volume of 120,000 shares can accompany a bounce from any of these support levels.

Picked on January 4th @ $42.81
Change since picked 0.00
Stop Loss @ $39.00