The Home Depot, Inc. (HD) was examined at the beginning of August where I wrote that "HD is not all that far from breaking out above its January zenith but it does not display the technical signs I like to see for making a commitment to the long side...Let's keep HD on our shopping list and visit the charts again real soon."
In the past few weeks HD has improved technically so let's pay it another visit.
(For more on HD, see Making Sense of This Market: Cramer's 'Mad Money' Recap)
In this updated daily bar chart of HD, below, we can see that prices are back above the flat 50-day moving average line. The slower-to-react 200-day moving average line is still bullish.
There was a volume surge in the middle of the month as prices reversed to the upside with the On-Balance-Volume (OBV) line turning up and the Moving Average Convergence Divergence (MACD) oscillator turning up to a cover shorts buy signal and now a buy signal.
In this weekly bar chart of HD, below, we can see that prices are above the rising 40-week moving average line.
The weekly OBV line is still pointed down but the MACD oscillator has improved and could soon generate a new go long signal.
In this Point and Figure chart of HD, below, we can see that a trade at $205.46 will be a triple top breakout and open the way to a $227 price target.
Bottom line strategy: HD looks ready to breakout on the topside. Aggressive traders can go long above $205.46 risking below $195 looking for gains to the $225-$230 area.