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.
On September 20, 2024, fellow MPTrader member Bloom asked Mike Paulenoff to look at his chart setup in Upstart Holdings (UPST). This is what they discussed in Mike's post to our Discussion Room in its entirety:UPST (Upstart Holdings)... It is NO coincidence that when the Fed initiated its rate HIKE cycle in March 2022, it coincided with the steep, contractionary, prolonged bear phase in cloud-based AI lender UPST.
Each Earnings Season (one is in progress as we speak), I analyze my technical setups on individual stocks to see if they provide enough evidence to issue a "highly confident" directional call to MPtrader members. In other words, what is my chart work telling me about the likelihood of a bullish or bearish investor reaction to Earnings?Suppose I apply the same approach to Tuesday's presidential election.
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On the afternoon of March 13, 2024, I posted the following heads-up to MPTrader members about important price action in WPM (Wheaton Precious Metals), my go-to ("favorite") name for Silver Mining within the larger Precious Metals Mining Complex:From a silver-gold perspective, let's notice that WPM strength is pushing up against its near-term resistance line in the vicinity of 45.80.
Over one month ago, on Monday morning, 9/09/24, I posted the following NVDA update for our members:My near-term pattern work makes a compelling argument that the corrective downleg from the 8/16 high at 131 is nearing downside exhaustion and completion in and around 100 (Friday's low was 100.95). That said, unless and until NVDA climbs above 106.30 to 108.
