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Bovis Homes revealed a 48% increase in annual profits in February, pushing the share price above the 900 mark. However, now the stock has dropped 19% since its high in March. Other housebuilders have lost ground in the past two months, but Bovis Homes has lost more than most. A combination of profit-taking and fear the UK is entering a housing bubble are behind the recent decline.
Mark Carney stated yesterday that interest rates will remain low for ‘some time’. Mr Carney also dismissed comments that loose monetary policy is fuelling a property boom.
Bovis Homes is currently trading at 761, and the stock is below the 200-day moving average of 805 which is a cause for concern. If its management statement is similar to that of Taylor Wimpey, in which the homebuilder issued bullish outlook and promised a special dividend this summer, we could target 843.