Home Depot Hitting Critical Support Level
I am a bit unorthodox when it comes to looking at stocks and the moving averages that I use. For instance, many people look at the 200-day moving average, but I have never understood that. Why 200 days? It is a random round number that doesn’t really represent a pertinent time period.
When it comes to weekly charts I like to look at 13-week, 52-week, and 104-week moving averages. These three time periods represent one quarter, one year, and two years. Those time periods seem relevant to me.
With these moving averages in mind, Home Depot (NYSE: HD) is hitting its 104-week moving average at this time and it is only the third time in the last five years that the moving average has come in to play.
The stock is oversold based on the weekly stochastic readings and the 10-week RSI was in overbought territory a few weeks ago. There has only been one other instance in the last five years where both of these oscillators were in overbought territory at the same time and that was in October 2016.
If the stock should drop below the 104-week moving average, it would be a very bad sign for it. There is minor support in the $150 area and the next layer of support after that would be in the $130 range.
Home Depot has great fundamentals with an EPS rating of 94 from Investor’s Business Daily and an A in the SMR rating system. This means the company has seen earnings growth over the last three years that is better than 94% of companies. The SMR rating measures sales growth, profit margin, and return on equity. An A rating is the highest rating a company can get.
HD's RSI Oscillator ascends from oversold territory
The RSI Indicator for HD moved out of oversold territory on April 09, 2025. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 22 similar instances when the indicator left oversold territory. In of the 22 cases the stock moved higher. This puts the odds of a move higher at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on April 22, 2025. You may want to consider a long position or call options on HD as a result. In of 85 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for HD just turned positive on April 10, 2025. Looking at past instances where HD's MACD turned positive, the stock continued to rise in of 51 cases over the following month. The odds of a continued upward trend are .
HD moved above its 50-day moving average on May 07, 2025 date and that indicates a change from a downward trend to an upward trend.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where HD advanced for three days, in of 352 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.
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 66 cases where HD's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
The 50-day moving average for HD moved below the 200-day moving average on April 08, 2025. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
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 .
The Aroon Indicator for HD entered a downward trend on April 15, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
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 low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 74, placing this stock better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent 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 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 (344.828) is very high in comparison to the industry average of (10.858). P/E Ratio (24.357) is within average values for comparable stocks, (34.733). Projected Growth (PEG Ratio) (2.045) is also within normal values, averaging (2.738). Dividend Yield (0.023) settles around the average of (0.034) among similar stocks. P/S Ratio (2.415) is also within normal values, averaging (20.083).
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General Information
a retailer of assortment of building materials and home improvement products
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