The H&S played out as forecasted, and then some. Interestingly, price collapsed thru that lower channel zone, and then quickly recovered. Note how the money flow and stochastics were positively diverged to provide the bounce but RSI and MACD indicators show lower values and are more agreeable to the down side returning. The plus for HD, LOW and other rebuilding stocks is the hurricane season ongoing into November. Considering that the indcators were not all positively diverged, traders bot HD as a play on hurricanes, which helped price jump off the bottom. The effects of Hurricane Irene are clearly seen as traders ran into HD at the 32 level when the storm formed. Into the weekend shoppers formed lines 100 deep to by generators, batteries, flashlights and other disaster preparedness items. HD should hold up better than most stocks since it is a hurricane play but price should ebb and flow as storms form, or not.
Hurricane Irene was just downgraded to a tropical storm as this snippet is written so some profit-taking and a pull back in price would be anticipated in the short term. Future storms forming off the African coast, however, will continue to support HD price moving forward into the Fall. September 10th is the peak of huricane season. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.
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