This Homebuilder Breaking Out: Mike Murphy

US homebuilders have reported some of their strongest quarters in several years fueling speculation that the sector is starting to turn the corner.

And trader Mike Murphy managing partner at Rosecliff Capital says amid the results one stock appears to be breaking out -- Toll Brothers.

If you believe the economy is recovering and that economy goes with it, Murphy says Toll Brothers appears to be positioned best.

“Toll builds a completely different product than most other home builders,” Murphy explains on CNBC’s Fast Money Halftime Report. “They focus on luxury and I think that area of the market recovers much more quickly.”

Also Murphy likes the fundamentals. “They have a great balance sheet and great management team,” he says.

“I’d trade against $25.50,” he says, “But I think it’s breaking out.”

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Trader disclosure: On May 2, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long VRTS; Joe Terranova is long JOY; Joe Terranova is long JNPR; Joe Terranova is long NXPI; Joe Terranova is long HPQ; Joe Terranova is long LQD; Joe Terranova is long JPM; Joe Terranova is long MCD; Josh Brown is long XBI; Josh Brown is long V; Josh Brown is long COP; Josh Brown is long JPM; Josh Brown is long XLU

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