Home Depot Tries to Break Out Before Housing Data
Home Depot could be attempting a breakout as investors await key industry data.
The main patterns on today’s chart are the falling trendline and the 50-day simple moving average (SMA). HD is attempting to push through both.
This is especially interesting because TradeStation data shows fewer than one-third of S&P 500 companies are above their 50-day SMAs. The fact HD remains above it shows the stock has spent more time bottoming than the broader market.
Next, MACD has been made higher lows for months as the stock made new lows. That’s a potential case of bullish divergence.
The 8-day exponential moving average (EMA) is also above the 21-day EMA.
Next, consider how the DIY giant has reacted to quarterly results this year. It tanked in February despite beating estimates. It tried to rally on strong numbers in May, but couldn’t get above the 50-day SMA. Such weakness isn’t a surprise considering market sentiment toward interest rates. But with that worry fading in the past month, will price react differently in the second half?
Traders could find out as early as this week, which features NAHB’s housing market index on Monday and housing starts/building permits on Tuesday. HD’s next quarterly results are due August 16.
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This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
The main patterns on today’s chart are the falling trendline and the 50-day simple moving average (SMA). HD is attempting to push through both.
This is especially interesting because TradeStation data shows fewer than one-third of S&P 500 companies are above their 50-day SMAs. The fact HD remains above it shows the stock has spent more time bottoming than the broader market.
Next, MACD has been made higher lows for months as the stock made new lows. That’s a potential case of bullish divergence.
The 8-day exponential moving average (EMA) is also above the 21-day EMA.
Next, consider how the DIY giant has reacted to quarterly results this year. It tanked in February despite beating estimates. It tried to rally on strong numbers in May, but couldn’t get above the 50-day SMA. Such weakness isn’t a surprise considering market sentiment toward interest rates. But with that worry fading in the past month, will price react differently in the second half?
Traders could find out as early as this week, which features NAHB’s housing market index on Monday and housing starts/building permits on Tuesday. HD’s next quarterly results are due August 16.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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