HD(Home Depot): All parabolic movements must come to an end

2019年7月23日

What goes up, must come down. While this is not always true in this world, it's much more likely than not that a parabolic movement will eventually see a sharp, then lengthy, dwindling correction before it continues upward. This may seem like a crazy chart, but there are some unavoidable signs that the housing market is slowing down. Some experts are now predicting we may see some recession in 2020. Home Depot is a leading indicator of the hosuing market dropping off. Looking at the facts, Home Depot has increased its value 1186% since the market crash in 2009. To assume there will be no correction for this parabolic move will be foolish. The question is, when, and at what price? I think we may be reaching a top, if we have not already around $219. RSI has been moving bearishly against the price action on the monthly chart and is now in a nuetral/bearish range for the first time in nearly a decade. As of now we are still producing higher highs, but we did show one lower low. I believe if the next upward movement doesn't show a higher high (above $219.30) we might be at the peak and ready for some correction. This could easily bring price all the way down to the .5 FIB of its parabolic movement, or around $118.

Am I suggesting you short Home Depot? Only if you're crazy. I like doing something out of the box once in a while though, so I'm going to play a small bag just for the sake of technical analysis.