Home Depot ($HD) Faces Bearish Signal Following Earnings Report
Home Depot (HD), the renowned home improvement retailer, recently released its earnings report, leaving investors with mixed sentiments. While the company's financial performance was satisfactory, a technical analysis indicator is raising concerns among market participants. On May 12, 2023, the 10-day moving average for HD crossed bearishly below the 50-day moving average, signaling a potential downward shift in the stock's trend.
This bearish crossover between the short-term and long-term moving averages has historically been considered a sell signal by technical analysts. Interestingly, historical data shows that in 11 out of 16 past instances when the 10-day moving average crossed below the 50-day moving average, Home Depot's stock continued to move higher over the following month. However, the odds of a continued downward trend are currently estimated to be around 69%, indicating a higher likelihood of the stock heading lower.
Despite this bearish technical indicator, it is important to note that technical analysis alone cannot predict the future direction of a stock with certainty. Investors should consider other factors, such as fundamental analysis and market conditions, to make well-informed investment decisions.
Home Depot's earnings report itself provided a mixed bag of results. The company reported solid revenue growth, driven by increased consumer spending on home improvement projects. As people continue to spend more time at home, the demand for products and services offered by Home Depot remains robust. Additionally, the company's digital sales have experienced significant growth, highlighting the successful integration of e-commerce into its business model.
On the other hand, Home Depot's earnings per share fell slightly short of analysts' expectations. Higher costs, including supply chain disruptions and increased wages, have impacted the company's profitability. These challenges are not unique to Home Depot, as many businesses across various industries have faced similar headwinds in recent times.
Looking ahead, Home Depot remains well-positioned to capitalize on the ongoing strength in the housing market and the DIY (do-it-yourself) trend. The company has a vast network of stores, a strong brand reputation, and a wide range of products, making it a go-to destination for consumers undertaking home improvement projects. Additionally, Home Depot's investments in its digital capabilities have allowed it to enhance the customer experience and capture the growing online market.
While the recent bearish signal from the moving averages raises concerns, it is essential to remember that short-term market fluctuations do not always reflect the long-term prospects of a company. Investors should consider a comprehensive analysis, taking into account both technical indicators and fundamental factors, before making any investment decisions.
Home Depot's earnings report presented a mixed picture, with strong revenue growth offset by slightly disappointing earnings per share. The bearish crossover between the 10-day and 50-day moving averages raises concerns about the stock's short-term trajectory. However, Home Depot's solid market position, robust demand, and ongoing investments in digital capabilities provide a favorable backdrop for long-term success.
HD in downward trend: price dove below 50-day moving average on October 01, 2025
HD moved below its 50-day moving average on October 01, 2025 date and that indicates a change from an upward trend to a downward trend. In of 40 similar past instances, the stock price decreased further within the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on September 19, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on HD as a result. In of 82 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for HD turned negative on September 17, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 49 similar instances when the indicator turned negative. In of the 49 cases the stock turned lower in the days that followed. This puts the odds of success at .
The 10-day moving average for HD crossed bearishly below the 50-day moving average on October 07, 2025. This indicates that the trend has shifted lower and could be considered a sell signal. In of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where HD declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where HD's RSI Indicator exited the oversold zone, of 26 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 16 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where HD advanced for three days, in of 342 cases, the price rose further within the following month. The odds of a continued upward trend are .
HD may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In of 283 cases where HD Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 75, placing this stock slightly better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. HD’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: HD's P/B Ratio (36.232) is very high in comparison to the industry average of (5.729). P/E Ratio (26.358) is within average values for comparable stocks, (72.096). HD's Projected Growth (PEG Ratio) (3.829) is slightly higher than the industry average of (1.682). Dividend Yield (0.024) settles around the average of (0.038) among similar stocks. HD's P/S Ratio (2.335) is slightly higher than the industry average of (1.020).
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General Information
a retailer of assortment of building materials and home improvement products
Industry HomeImprovementChains
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