No matter how one tries, there's virtually no way to sugar-coat KB Home's Q3 earnings report.

Los Angeles-based KB Home (NYSE: KBH) Thursday posted a Q3 EPS loss of $6.19 compared to the Reuters consensus estimate of a loss of 71 cents.

The company said Q3 revenue totaled $1.53B, down 33% from a year ago, and below the $1.59B Reuters consensus estimate.

KB Home said net orders for new homes, one indicator of future sales, were down 6% to 3,907, while unit deliveries plunged 28% to 5,699. Also, the average selling price declined 7% to $267,700. Further, the cancellation rate increased to 50% from the prior quarter's 34%.

New orders down significantly. Deliveries plunge. Average selling prices decline. Can one discern any positive data points from KBH's report? Not really, and KBH's CEO Jeffrey Mezger's comments spoke to that reality.

The results "reflect the seriously challenging market conditions that prevail for home builders across most of the nation," said Mezger in a statement. "At this time, we see no signs that the housing market is stabilizing and believe it will be some time before a recovery begins."

KBH's share traded 5 cents lower to $24.04 in Thursday afternoon trading.

(Note: Technical analysis agnostics stop reading here. All others, continue.)

Further, KBH's chart provided clues that the Q3 report would not be favorable. Technicals analysis assumes that all information that can be known about a stock has already been arbitraged into a stock, and if that information has been negative, the stock's chart should reflect a bearish trend; positive, a bullish trend. A trend can change with new, contrary information, but absent that, the current trend continues, and KBH provides a case study for that theory. KBH's stock has been below its 50-day moving average for more than four months, and for more than seven months if one discounts a minor breach this spring -- a bearish trend.

Further, KBH's relative strength index, or RSI, has not hit "overbought" levels for more than six months, which indicates that when buying pressure has occurred, it hasn't lasted for very long.And by extension, absent sustained buying pressure, it's difficult for a stock's price to rise.

Fly Analysis: KB Home is a high-risk stock not suitable for low- and moderate-risk investors. Investors, except those with risk capital to deploy, should avoid KBH at least until the rise in both subprime mortgage defaults and better-credit mortgage defaults ends and the U.S.'s large inventory of unsold homes begins to decline.