• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

Home Depot Could Be on Sale for a Bit After Disappointing Guidance

The charts of the big home improvement retailer already were lackluster ahead of its latest results.
By BRUCE KAMICH
Feb 21, 2023 | 07:28 AM EST
Stocks quotes in this article: HD

The Home Depot Inc. (HD)  saw its shares slip early Tuesday on a small fourth-quarter sales miss and cautious guidance for its current fiscal year. Let's check the charts and indicators of the big home improvement retailer and Dow Jones Industrial Average component ahead of the opening of trading this morning.

In this daily bar chart of HD, below, I can see a picture that suggests weakness ahead. Prices have been in a large sideways pattern the past year. Prices have crossed the 50-day moving average line a number of times and a rally above the 200-day line has stalled. Trading volume does not show me a bullish trend but rather a lack of interest in recent weeks. Prices have been holding the $310 area in recent weeks but HD is poised to break that area on the opening Tuesday.

The daily On-Balance-Volume (OBV) has been stalled since the middle of December and the trend-following Moving Average Convergence Divergence (MACD) oscillator is weak and poised to move to a sell signal on a close below the zero line.

 
 
In this weekly Japanese candlestick chart of HD, below, I see a soft picture. Prices were trading above the 40-week moving average line but that indicator is likely to be tested in the days ahead. There are a number of upper shadows in the $340 area that tell me traders have rejected the highs and the path of least resistance is lower. The weekly OBV line shows only a slight improvement the past three months. The MACD oscillator has narrowed and is poised for a downside crossover and take profit sell signal.
 
 
In this daily Point and Figure chart of HD, below, I can see the price action through Friday. An upside price target is shown but a trade at $304 will refresh the downtrend and likely precipitate further declines.
 
 
In this weekly Point and Figure chart of HD, below, I can see a trade at $308.96 should turn the chart bearish.
 
 
 
 
Bottom line strategy: Traders should avoid the long side of HD for now. Support may develop in the $280 area but I am in no rush to make a buy recommendation.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Earnings | Investing | Stocks | Technical Analysis | Consumer | Retail | Real Money | Consumer Discretionary

More from Stocks

Market's Narrow and Dull but Not Bad

James "Rev Shark" DePorre
Mar 29, 2023 4:26 PM EDT

Here are the two things that stood out in Wednesday's trading.

Battery Maker Enovix Could Soon Be Charged Up to Rally Further

Bruce Kamich
Mar 29, 2023 2:56 PM EDT

The stock has been impressive but gains from here may be harder to achieve.

Except for Energy, I'd Be Wary of Cyclical Stocks

Bret Jensen
Mar 29, 2023 11:30 AM EDT

Another increasing concern for equities is that we are likely to see an 'earnings recession'.

Think the Market Action Is Dull Now? Just Wait for the Storm

James "Rev Shark" DePorre
Mar 29, 2023 11:15 AM EDT

Until we have a better feel for what the Fed will do, it will be hard for the market to discount what lies ahead.

Micron Stock Shows Resilience After an 'Ugly' Quarter, But Is It a Buy?

Stephen Guilfoyle
Mar 29, 2023 10:20 AM EDT

This is a tough stock or sector (memory) of the industry to love right now.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 04:00 PM EDT CHRIS VERSACE

    AAP Podcast: This Solar Company Is a Head-Turner

    Listen to my interview with Brian Roth, CEO of sol...
  • 01:56 PM EDT PETER TCHIR

    Very Cautious

    I am very cautious here. I don't like how the c...
  • 08:58 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    How to Adjust Your Trading Style as Market Conditi...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login