Welcome aboard JimD! Let’s see if we can’t analyze the long-term charts for Home Depot (HD) and try to answer your question.

Home Depot (HD)

This first chart is a 20 year monthly chart. I always like to start off with a long-term trend when its been a while since the last chart review. My last update for Home Depot (HD) was at least a couple years ago. That can be evidenced by the black Fibonacci Extension Tool. Anchor Point #1 for the tool is off to the left of the screen.

Think or Swim only provides me with 20 years of chart history, but it will not erase charting tools that end up partly off the screen. Anchor point #1 for the black Fibonacci Extension Tool is October 8, 1995 at a price of $8.14. The 261.8% Target Line from the black Fibonacci Extension Tool still seems relevant as far as the closing share price for the last 2 months.

There is no real confluence area of Target Lines from the 3 different Fibonacci Extension Tools, so I will instead just focus on the most recent uptrend that began at the $120 price level back in November 2016.

The uptrend that began back in November 2016 looks to be forming a Bullish Impulse wave pattern. The green Fibonacci Extension Tool can be used to estimate the end point for Wave 5 of the Bullish Impulse wave pattern.

It is possible that the wave pattern extends and reaches higher, but the conservative price target for when the uptrend resumes is the[s2If !current_user_can(access_s2member_level1)]….

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I review some long-term price targets and support areas for its current pullback.

If you are not a Trendy Stock Charts member, consider joining today! There are several different subscription plans available.[/s2If][s2If current_user_can(access_s2member_level1)]$211.65 price level. The $211.65 price level is represented by the 161.8% Target Line from the green Fibonacci Extension Tool. The 161.8% Target Line is the most common target area for Impulse wave patterns. The 161.8% Target Line is also referred to as the Golden Ratio. The Golden Ratio is a key ratio for “growth” and can be found in a tremendous amount of architecture in ancient buildings like the pyramids. The Golden Ratio concept has been around for centuries.

A more bullish price objective would be the $240 price level. That price level is represented by the blue Fibonacci Extension Tool’s 100% Target Line. In order to reach that price target level Home Depot would most likely have to have a Wave 5 extension to its Bullish Impulse wave pattern. Something not out of the question but not likely at the moment.

Right now, it appears that HD’s share price is somewhere in Wave 4 of the pattern. Let’s see if a shorter-term weekly chart can provide more details as to where exactly it may be in Wave 4.

HD – 2 Year Weekly Chart

This next chart is a 2 year weekly candlestick chart to focus on the uptrend that began back in November 2016. I’ve made several notes on the chart so go ahead and take a moment to read them, I’ll wait.

HD’s share price developed a Bearish Engulfing candlestick pattern when it made its high of $207.61. The selling volume for the Bearish Engulfing candlestick pattern will most likely cause quite a bit of resistance for the share price on any attempted push above it. Any push above the previous high will most likely be very short-lived if it does happen.

The Elliott waves seem to indicate one last push but that candlestick pattern will be quite hard to get past. Selling near the previous high and locking in profits would be recommended. Maybe consider not even waiting for the push into the Wave 5 target zone. The rebound is something that can be monitored as it happens and final decisions made then.

If HD’s share price keeps pulling back over the next week or two and HD’s share price pulls below the top of Wave 1, the next uptrend to reach the Wave 5 target zone will be HD’s final uptrend for some time. You would definitely want to fully exit positions if that activity takes place for HD’s share price.

We are looking at an estimated 6 month time frame for HD to reach the target zone.

HD – Moving Averages

This last chart is a 1 year moving average chart for Home Depot (HD). It looks as if HD tried to take back control of the 20 Day Moving Average (purple line) on Friday – it closed right above it.

Look to see if HD’s share price can stay above the 20 Day moving average next week. Look for a push from the line on heavy buying volume. A lack of both of those and HD could see further pain and a test of the 200 Day moving average before its attempted rebound.

HD – Point & Figure

For the heck of it, let’s see what the Point & Figure charts say about HD’s upcoming price action.

High/Low P&F Chart – $151 Bearish Price Objective

Closing P&F Chart – $153 Bearish Price Objective

Both of the P&F Charts indicate further weakness. While that is not a certainty of a further pullback, it does warrant caution. Reaching those price targets is going to involve breaking through the 200 Day moving average on heavy selling volume.

Home Depot (HD) – Summary

Well JimD, after quite a bit of analysis I would like to say that Home Depot (HD) does appear to be going back up and will get a rebound uptrend of some sort. The trick will be to monitor the rebound to see if it will be able to push above the previous high or not. That is something that will require monitoring as it gets closer to the previous high.

One more all-time high does look probable from an Elliott Wave perspective, but there may be some more short-term pain before any attempted rebound occurs. A push down to the $150 level could develop according to the P&F Charts. But if you are holding shares from around the previous high, you should get a chance to get rid of those shares back near the high in the next 6-9 months.

There is a lot of technical information above. If you have questions at any time (even a month down the road) go ahead and ask by sending me a text or email.

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