| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendation | SELL STOP |
| Entry Point | 387.95 |
| Take Profit | 360.00 |
| Stop Loss | 400.00 |
| Key Levels | 360.00, 388.00, 398.00, 421.00 |
| Alternative scenario | |
|---|---|
| Recommendation | BUY STOP |
| Entry Point | 398.05 |
| Take Profit | 421.00 |
| Stop Loss | 390.00 |
| Key Levels | 360.00, 388.00, 398.00, 421.00 |
Current trend
The stocks of The Home Depot Inc., the largest home improvement company, are trading in a correction trend at 393.00.
Amid the approaching earnings season, leading experts continue to re-evaluate the shares of issuers related to the retail sector. Thus, Bernstein experts in a research note, when comparing two main competitors in the industry, The Home Depot Inc. and Lowe’s Companies Inc., preferring the latter due to its advantage in increasing the existing core of regular customers of the Pro category. Despite this, the rating of the corporation remained Market-Perform, and the target price rose to 451.00 in anticipation of the holiday shopping season, which always has a positive effect on the sector’s profits.
The publication of Q3 financial data is due on November 12. According to preliminary estimates, revenue will decrease from 43.18B dollars to 39.21B dollars, and earnings per share (EPS) – from 4.67 dollars to 3.63 dollars.
Support and resistance
On the daily chart, the trading instrument is correcting within the uptrend above the support line of the ascending channel 422.00–380.00.
Technical indicators are weakening the buy signal and are preparing for its reversal: fast EMAs on the Alligator indicator cross the signal line downwards, and the AO histogram forms correction bars in the sell zone.
Resistance levels: 398.00, 421.00.
Support levels: 388.00, 360.00.
Trading tips
Short positions may be opened after the price declines and consolidates below 388.00, with the target at 360.00 and stop loss 400.00. Implementation period: 7 days or more.
Long positions may be opened after the price grows and consolidates above 398.00, with the target at 421.00. Stop loss — 390.00.
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