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 moved above its 50-day moving average on June 02, 2023 date and that indicates a change from a downward trend to an upward trend. In of 35 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on June 02, 2023. 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 June 02, 2023. Looking at past instances where HD's MACD turned positive, the stock continued to rise in of 47 cases over the following month. The odds of a continued upward trend are .
The 10-day moving average for HD crossed bullishly above the 50-day moving average on June 05, 2023. This indicates that the trend has shifted higher and could be considered a buy signal. In of 16 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where HD advanced for three days, in of 357 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Stochastic Oscillator has been in the overbought zone for 2 days. Expect a price pull-back in the near future.
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 .
HD broke above its upper Bollinger Band on June 07, 2023. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for HD entered a downward trend on May 25, 2023. 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 76, placing this stock better than average.
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 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 Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued 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 (833.333) is very high in comparison to the industry average of (13.763). P/E Ratio (18.382) is within average values for comparable stocks, (25.211). Projected Growth (PEG Ratio) (1.976) is also within normal values, averaging (2.521). Dividend Yield (0.026) settles around the average of (0.037) among similar stocks. P/S Ratio (1.976) is also within normal values, averaging (69.877).
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a retailer of assortment of building materials and home improvement products
A.I.dvisor indicates that over the last year, HD has been closely correlated with LOW. These tickers have moved in lockstep 91% of the time. This A.I.-generated data suggests there is a high statistical probability that if HD jumps, then LOW could also see price increases.