Current trend

The shares of The Home Depot Inc., the largest home improvement company, are growing within the long-term upward trend, reaching 52-week highs of 401.08.

The prices are supported by the easing of the monetary policy of the US Fed, which can significantly affect the growth of the profits of the world leader in the trade of goods for home and repair. Experts expect that the reduction in the interest rate will ease the pressure on the labor market and the construction sector, as a result of which the volume of new home sales will increase, supporting the demand for the assortment of The Home Depot Inc. Earlier, the head of the corporation Ted Decker noted that the peak cost of borrowing and economic uncertainty significantly restrain household spending on home improvement.

The financial statements for the previous quarter were also positive, further supporting the issuer’s securities: revenue amounted to 43.18B dollars, 0.6% more than last year, and earnings per share were 4.67 dollars compared to 4.65 dollars.

In general, fundamental factors remain positive, making the positive dynamics quite likely.

Support and resistance

The trading instrument is close to the upper border of the ascending channel. After consolidation above, it may grow to the area of ​​421.88 (Murrey level [ 2/8], H4) and 437.50 (Murrey level [ 2/8], W1). After a breakdown of 390.62 (Murrey level [ 1/8]), a correction to the middle line of Bollinger bands 375.00 (Murrey level [8/8]) may follow.

Technical indicators reflect that the upward trend will continue. Bollinger Bands and Stochastic are pointing upwards, and the MACD histogram is increasing in the positive zone.

Resistance levels: 406.25, 421.88, 437.50.

Support levels: 390.62, 375.00.

Trading tips

Long positions may be opened above 406.25 or when the price reverses around 375.00, with the targets at 421.88 and 437.50. Stop losses are 395.10 and 365.00, respectively. Implementation period: 5–7 days.