Home Depot: A Deeper Retest Needed?
Home Depot has been ripping higher as Americans spend on their homes. But now the chart may be pointing to sideways movement.
First, consider the large bearish engulfing day on January 3. It followed a similar candle on December 8, which may indicate sellers are active above $410.
Next, the two peaks have created a downward-sloping channel. The bottom of the pattern roughly corresponds with the $375-379 area where HD gapped higher on November 16. Will it fill that gap?
Third, the lower high could suggest an ABC correction is starting. That could also point toward a deeper retest.
Finally, the macro tide may be turning away from HD as the Federal Reserve grows increasingly hawkish.
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First, consider the large bearish engulfing day on January 3. It followed a similar candle on December 8, which may indicate sellers are active above $410.
Next, the two peaks have created a downward-sloping channel. The bottom of the pattern roughly corresponds with the $375-379 area where HD gapped higher on November 16. Will it fill that gap?
Third, the lower high could suggest an ABC correction is starting. That could also point toward a deeper retest.
Finally, the macro tide may be turning away from HD as the Federal Reserve grows increasingly hawkish.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradingView is not affiliated with TradeStation Securities Inc. or its affiliates. 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. 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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