Market Review

The Home Depot Inc. (HD/NYSE): general analysis

Current trend

Shares of The Home Depot are trading at a premium of 4.2% to a 52-week low of November 23. Since the beginning of the year, quotes have lost more than 7%. Earlier, on November 13, the company reported for 3 quarter of 2018 above market expectations, and also increased its revenue and profit forecast for 2018. Earnings per share increased by 36% YoY due to the effect of tax reform. Revenue increased by 5.1% against the last year’s value.

During the last week, The Home Depot decreased by 0.83% against the decrease of the S&P 500 index by 1.76%.

Support and resistance

The company’s shares have developed an ambiguous technical picture. The instrument is trading flat. At the moment, the local levels of support and resistance are 171.50 and 177.50. There is a potential for recovery. Indicators do not give clear signals: the price approached the MA (50), which is a strong dynamic resistance; the MACD histogram is near the zero line. It is better to open the positions from the key levels.

Comparative analysis of the multipliers of the company and competing companies indicates the neutrality of #HD.

Resistance levels: 177.50, 183.00, 188.00.

Support levels: 171.50, 167.50, 163.00.

Trading tips

Long positions can be opened after the price is fixed above the level of 177.50. The closing of the profitable positions is possible at the levels of 182.00, 186.00 and 190.00. Stop loss is 173.00.

Short positions can be opened after the price is set below the level of 171.50 with the targets at 164.00–160.00. Stop loss is 176.00.

Implementation period: 3 days.

Scenario

Timeframe Intraday
Recommendation BUY STOP
Entry Point 177.50
Take Profit 182.00, 186.00, 190.00
Stop Loss 176.00, 173.00
Key Levels 163.00, 167.50, 171.50, 177.50, 183.00, 188.00

Alternative scenario

Timeframe Intraday
Recommendation SELL STOP
Entry Point 171.45
Take Profit 164.00, 160.00
Stop Loss 176.00
Key Levels 163.00, 167.50, 171.50, 177.50, 183.00, 188.00

About us

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