Residence Depot, Its Charts Already Weakening, Is Drilled After Earnings

Residence enchancment retailer Residence Depot Inc. (HD) reported its fourth-quarter outcomes Tuesday morning and beat earnings and income forecasts, however merchants have been sellers of the inventory on the open. In our Dec. 6 evaluate of Residence Depot we wrote, “My native Residence Depot retailer has been busy and the charts are nonetheless pointed up — for now. Merchants ought to nail down some earnings now that our $412 worth goal has been reached and a doji sample has appeared on the weekly candle chart.”

Let’s take a contemporary have a look at the charts and indicators of Residence Depot.

On this day by day bar chart of HD, under, we are able to see that costs made a small double top-like sample in December and January. This sample doesn’t span months like a basic double high would, however costs are beneath stress however. HD examined the cresting 200-day shifting common line in January and has been buying and selling under this indicator in February. The slope of the 50-day shifting common line turned damaging/bearish in January and continues to be pointed decrease. The buying and selling quantity has been heavier the previous three months as merchants and traders look like voting with their ft. The mathematics-driven On-Stability-Quantity (OBV) line has been weak in 2022 and tells me that sellers of HD have been extra aggressive. The Shifting Common Convergence Divergence (MACD) oscillator crossed under the zero line in early January for a promote sign and that’s nonetheless in drive.

On this weekly Japanese candlestick chart of HD, under, we are able to see a blended to bearish image. Costs have been testing the cresting 40-week shifting common line however the current candle sample exhibits an higher shadow, telling us within the week earlier than earnings that merchants are rejecting the highs. The weekly OBV line exhibits a decline from the center of December and the MACD oscillator is pointed down in a take earnings promote mode.

On this day by day Level and Determine chart of HD, under, we are able to see that costs reached a draw back worth goal of $345. A commerce at $340 will refresh the downtrend.

On this weekly Level and Determine chart of HD, under, we used close-only worth knowledge. Right here the software program is projecting a possible decline to the $289 space.

Backside line technique: I anticipate to be making many journeys to my native HD retailer for varied issues for my new residence however I do not assume my purchases will assist the inventory. Keep away from the lengthy aspect of HD as a greater shopping for alternative might be months away.

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