HD Home Depot Weekly Chart Head and Shoulders Pattern

May as well post one more housing sector stock this morning since Housing Starts are a major focus. HD's daily chart is the same set up as LL. HD's weekly chart clearly shows the negative divergence creating a top in HD, along with overbot conditions and the rising wedge. The H&S, with 65 head and 59 neck line, projects a 53 target should the 59 level fail. The Fed announced Operation Twist and the ECB began LTRO 1 and said LTRO 2 was quickly on the way in August-December 2011. The easy money pumped the housing market, look at the run in HD from late 2011 to early 2012, phenomenal.  The a rest and note that when Draghi said he would support the euro by all means necessary, boiiinnng, another big jump higher since the money would be flowing like water. Stocks simply are pumped higher on the free money in the system, fundamentals be d*mned. Price is now at lofty levels and rolling over.  Spring is typically a good time for HD and LOW since the building season begins and folks also run out to buy plants for landscaping and gardens.  Note the money flow placing a lower low but price is well above the comparable previous price. This will act as a weight on price. Projection is lower prices moving forward with the 59 neck line failing and price moving down towards 53 as the weeks move forward. Housing Starts are released this morning and will impact HD. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

Note Added 1/17/13 at 9:40 AM:  Housing Starts were blow-out to the upside at 945K, highest number since July 2008, so HD jumps higher now at 64.46.  Watch to see if it eeks out the new high, which would nullify the H&S pattern, but at the same time check for negative divergence if a print above 65 occurs.

Note Added 1/17/13 at 5:05 PM:  HD finishes above 65 today.  The daily chart now has some VST momo, the weekly chart is negative, so likely a move thru 64-66 for a few days then roll over to the downside. The daily chart will take a few days to develop negative divergence.