In what could be a good sign for housing and the economy, Home Depot (HD) exceeded its summer highs and hit a 52-week high. Home Depot is an interesting company because can be considered part of the housing industry and the retail industry. These two industries are very important to the consumer discretionary sector and this is the most economically sensitive sector. The chart below shows HD getting its first higher high with the November surge and break above 130. The stock then stalled with a small wedge/pennant and broke out with another surge in December. HD formed another bullish continuation pattern with the falling flag into early January and broke out with a move above 136 eight days ago. Buying pressure remains strong as HD surged over 1.5% on Monday and recorded a fresh 52-week high. Note that 52-week highs are rarely isolated events and this suggests that there are more to come in the next few weeks and months. At the very least, the big trend is clearly up when a stock hits a 52-week high. The indicator window shows MACD turning up moving above its signal line.
****************************************
Thanks for tuning in and have a great day!
--Arthur Hill CMT
Plan your Trade and Trade your Plan
****************************************
