Home Depot Inc (HD) specializes in the home improvement retail sector. It offers home improvements products through its successful e-commerce sites and vast distribution network. It also provides professional services in a B2B model. HD is listed on NYSE. It is a component of DJI and S&P 500 under Consumer Discretionary.

HD ended 2021 on a high. However, the price peaked on 3 Jan 2022 around $407 with an upthrust followed by a significant Wyckoff sign of weakness (SOW) move down. It was a clear down trend.

The spike of volume that suggests presence of supply on 22 Feb resembles the action of Wyckoff selling climax (SC). The price found support followed by an automatic rally to define a range between $292 and $323. There was an attempt to upthrust but subsequent reaction was a test to the lower side of the range. The slided further down in May and was unable to commit above $292. In fact, the price broke below the support on 10 June and tested $261 on 22 June.

At this point, HD could potentially further redistribute to a lower level. However, the price action on 24 June with a spike in supply suggests the presence of demand. It was then followed by a steady Wyckoff sign of strength rally (SOS) with low volume. Eventually, the price created a Wyckoff upthrust pattern on 16 August and a retest to the low of $264 around end of September.

The price bounced off the $268 support several times until the gap up action on 10 Nov with localized increase in volume to initiate a sign of strength rally. The spike of volume on 30 Nov provided support around $311. The price hit $347 on 13 Dec and has since retraced to near support of $311. 

Bias

Short term range bound, bullish in mid term. According to the Wyckoff method, if HD price is to commit above $323, it could rally up to challenge $347 and beyond.

The bullish scenario will be violated if the price broke below $311 and it will likely retest the next support level at 292 followed by 270. Recent volatility in the market makes it hard to find winning stocks. It is essential to focus on the outperforming stocks in order to gain an edge in the market.

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