Home Depot’s (HD) long steady march up the rankings in the SIA S&P 100 Index Report started to fade about a month ago but has completely fallen apart in the week since the home improvement retailer reported disappointing results and guidance. Yesterday, it dropped another 8 spots to 52nd place at the bottom of the Yellow Neutral Zone and only one position above the red zone. HD has dropped 20 places in the last month.
Last fall, Home Depot (HD) broke out of a base, but since December, the shares have been increasingly struggling. A rally attempt failed at a lower high last month and since then the shares have been under distribution. First, they broke down below their 50-day average near $325.00 and retested it as new resistance, then HD gapped down on a volume spike after earnings confirming increased selling pressure.
Since then, the shares have continued to retreat, falling back under their 200-day moving average and the $300.00 round number, a point which has reversed polarity to become initial resistance. Next potential downside support appears at summer lows in the $265.00-$275.00 area, followed by the $250.00 round number.
This 1% chart highlights the severity of the recent failed breakout and downturn in Home Depot (HD) shares. Technically, HD was looking good last month staging a triple top breakout, but the advance only lasted for two rows before the shares turned sharply downward, a bearish Bull Trap reversal. Since then, HD has continued to sell off, staging a bearish Double Bottom breakdown and extending its decline into a bearish Low Pole.
Next potential downside support levels appear near $279.35, $273.85, and $263.15 based on previous column highs and lows. Initial rebound resistance appears near the $300.00 round number, then $305.50 based on a 3-box reversal.
With a bearish SMAX score of 5, HD is exhibiting weakness against the asset classes.
Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.
