Home Depot: A Deeper Retest Needed?Home Depot has been ripping higher as Americans spend on their homes. But now the chart may be pointing to sideways movement.
First, consider the large bearish engulfing day on January 3. It followed a similar candle on December 8, which may indicate sellers are active above $410.
Next, the two peaks have created a downward-sloping channel. The bottom of the pattern roughly corresponds with the $375-379 area where HD gapped higher on November 16. Will it fill that gap?
Third, the lower high could suggest an ABC correction is starting. That could also point toward a deeper retest.
Finally, the macro tide may be turning away from HD as the Federal Reserve grows increasingly hawkish.
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