C = Catalyst for a Stock’s Movement
The home improvement industry is booming. As consumers are not buying up new homes left and right, they look to improve the one they are in and Home Depot (NYSE:HD) is one to benefit. Not to mention, real estate investors are taking advantage of low interest rates and snatching up those investment properties. Rental properties need care and maintenance so again, Home Depot is in the right industry at the right time.
T = Technicals on the Stock Chart are Strong
Taking a look at Home Depot’s daily price chart, its easy to spot the higher highs and higher lows, the definition of an uptrend. Home Depot’s stock is headed towards all time highs of $70 per share, not seen since 1999. This home improvement retailer is trading around 10-year highs and just about 8.5% from reaching all-time highs. With some digestion, look for this stock to build up steam and push beyond all-time highs.
Moving averages are a simple method used when evaluating a trend. In an uptrend, a stock should be trading above its rising key simple moving averages. What are the key moving averages? The 50-day, 100-day, and 200-day. Trading above the 20-day moving average is just icing on the cake. Today, Home Depot stock is trading above its 50-day, 100-day, and 200-day simple moving averages. Moreover, the moving averages should be stacked in consecutive order and upward sloping. This is precisely the way these moving averages look on Home Depot’s price chart. So far, price action and moving averages…