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Home Depot Inc. - (HD) - March 2, 2023

Home Depot’s (HD) long steady march up the rankings in the SIA S&P 100 Index Report started to fade about a month ago but has completely fallen apart in the week since the home improvement retailer reported disappointing results and guidance. Yesterday, it dropped another 8 spots to 52nd place at the bottom of the Yellow Neutral Zone and only one position above the red zone. HD has dropped 20 places in the last month.

Last fall, Home Depot (HD) broke out of a base, but since December, the shares have been increasingly struggling. A rally attempt failed at a lower high last month and since then the shares have been under distribution. First, they broke down below their 50-day average near $325.00 and retested it as new resistance, then HD gapped down on a volume spike after earnings confirming increased selling pressure.

Since then, the shares have continued to retreat, falling back under their 200-day moving average and the $300.00 round number, a point which has reversed polarity to become initial resistance. Next potential downside support appears at summer lows in the $265.00-$275.00 area, followed by the $250.00 round number.

This 1% chart highlights the severity of the recent failed breakout and downturn in Home Depot (HD) shares. Technically, HD was looking good last month staging a triple top breakout, but the advance only lasted for two rows before the shares turned sharply downward, a bearish Bull Trap reversal. Since then, HD has continued to sell off, staging a bearish Double Bottom breakdown and extending its decline into a bearish Low Pole.

Next potential downside support levels appear near $279.35, $273.85, and $263.15 based on previous column highs and lows. Initial rebound resistance appears near the $300.00 round number, then $305.50 based on a 3-box reversal.

With a bearish SMAX score of 5, HD is exhibiting weakness against the asset classes.

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