DR Horton Given the Thumbs Up

Homebuilder DR Horton (NYSE: DHI) is rising over 3% today after and upgrade from sell to hold at Citigroup. The new price target is $10.50. I see that the Dec 11 calls have already traded 9,686 contracts on 1,550 open interest, indicating opening positions. The Jan 2010 12.50 strike is also seeking purchases; over 3,000 calls have traded.

DR Horton has been more or less flat-lined for the past two years, as one would expect in a housing downturn. I am cautious on the name; my preferred homebuilder is Pulte due to the fact that they have the largest cash position of any homebuilder and are positioned at the lower and mid level market segments. I have no positions in any homebuilders at this time, however.