Downgrades Pressure Homebuilding Stocks

Group 1: Company Performance - Lennar Corp (LEN) and DR Horton Inc (DHI) stocks are down following Citigroup's downgrade to "neutral" from "buy," with price targets reduced to $164 from $174 for LEN and $156 from $181 for DHI due to risk/reward ratios [1][2] - Lennar's stock is down 2.4% to $142.38, marking its lowest level since December, and has decreased 17% from its record high of $172.54 on March 28, although it remains up 31.5% over the last nine months [1] - DR Horton has also dropped 1.2% to $135.52, reaching its lowest level since December, and is down 11.8% year-to-date, with an 18% decline from its April 1 high of $165.75 [2] Group 2: Market Trends - Lennar's shares are poised to close below their 200-day moving average for the first time since November [1] - DR Horton's stock breached its 200-day moving average today, following a previous breach of the 160-day trendline last month [2] - Options trading activity for both companies has increased significantly, with Lennar's put/call open interest ratio at 0.79, indicating bullish sentiment among short-term options traders [1] Group 3: Options Activity - For DR Horton, 1,444 calls and 1,843 puts have been traded today, which is triple the average intraday volume, with the January 17, 2025, 150-strike call being the most popular contract [2] - The June 95-strike put for DR Horton is also seeing new positions being opened [2]