Out Front Of HD's Price Reversal
by Mike Paulenoff
May 23, 2021 • 10:54 AM EDT
After Home Depot (HD) announced earnings on Tuesday that beat the Street on most of the important metrics, goosing the stock to the 327.25 area, Mike Paulenoff cautioned MPTrader members.
He briefly discussed HD's near-term technical set up, which looked promising as long as HD held support above 315.21, but then added:
"From a Bigger Picture perspective, my work presents some less promising prospects for HD's potential upside price path. Let's notice on my attached Daily Chart that the last time HD's Price AND Momentum hit confirming new highs was on April 16th. The subsequent new ATH in price at 345.69 on May 10th was NOT CONFIRMED by Daily Momentum, and as such, represents a glaring non-confirmation that serves as a warning signal to anyone who is camped-out in an entrenched long position -- that the power driving HD higher has dissipated, and continues to dissipate as price moves higher."
Later that day, HD reversed sharply, closing lower on the session, injecting serious negativity into Mike's near and intermediate technical work.
The poor performance of HD's stock did not go unnoticed by HD management. On Thursday afternoon after the close (at 315.90), HD "surprised" The Street by authorizing a new $20 billion share repurchase program.
On Friday, after popping higher to 319.28, HD closed the session lower, at 315.77, despite the influence of Tuesday's strong earnings report and Thursday's stock buyback announcement.
HD's poor stock performance certainly appears to be reflecting Mike's problematic "bigger picture" technical set-up.
What's next for the price of HD? Will it continue to hold above its 50 DMA (now at 313.80)? If not, to what target zones does Mike's work project weakness? Will HD weakness weigh on overall market direction?
Join Mike and MPTrader members for discussions about HD, as well as many individual stocks, ETFs, macro indices, cryptos, and commodities.
At the close of trading on December 18, 2024, this was my final thought posted to our discussion room at MPTrader.com:ES (March 2024 E-mini SP 500)-- Stating the obvious: Today's reaction to the FOMC Rate CUT (!!) inflicted serious near-term technical damage to the dominant, post-August uptrend... Last 5960.75...Thirty minutes after the close on December 18, 2024, I followed up with this commentary for MPTraders:My preliminary "conclusion" about today's outsized 3.
On December 20, 2024, this is what we discussed about the relentless four-week correction from NVDA's ATH at 152.89 (11/21/24) to a low at 126.35 on 12/20/24:Three Times is a Charm? For the third time this week, NVDA spiked down into the lower reaches of my optimal corrective target window from 132 to 125-- this AM representing the latest spike low at 126.35-- and for the third time, buyers emerged, propelling NVDA higher to 130-132. As we speak, NVDA is trading at 131.
On December 13, 2024, with NVDA trading at 132.54, down 13.3% from its All-Time High at 152.89 (11/21/24), and bearing down on a critical 8-week support plateau at 131-132, this is what I posted to MPTraders:NVDA Update: Approaching key support in the vicinity of 132 that if violated and sustained, could unleash the downside potential derived from a two-month top formation (everyone sees the Head and Shoulders formation by now).
Friday afternoon, fifteen minutes before the closing bell in the equity indices, this was my parting comment about Bitcoin:Heading into the weekend, the technical setup argues against holding shorts in Bitcoin... no?...
Many of you have been members of MPTrader for years, perhaps decades (I have been providing MPTrader.com analysis since February 2003!). Rarely do I take a victory lap about my stock, ETF, and market calls, largely because I have always thought my work should speak for itself, which obviates the need to bloviate and beat my chest to stroke my ego. At my core, I am a market nerd and Geek, not a slick-talking marketer (for better or worse).
