HD Home Depot Weekly Chart Earnings Beat Rising Wedge Overbot Negative Divergence

Any short-seller is very happy that they did not short this high flyer.  With the housing recovery ongoing, HD is a stand-out performer benefiting from the increased construction activity as well as benefiting from sad tragedies such as Hurricane Sandy on the East Coast last year and even the devastating E-4 tornado in Oklahoma yesterday (rebuilding). Earnings were just released minutes ago and HD beat on bottom and top lines and announces strong guidance forward. HD is up +4% pre-market to 80 so the party continues.

HD has had a stellar run from the bottom created after the August 2011 waterfall market crash moving from 25 to 80, a triple. The chart clearly shows negative divergence in place, ditto the daily chart, except for the MACD line that wants to squeeze a bit more juice out, and it receives its wish today with the earnings beat and an up move to the red dot is on tap. Keystone's 80/20 rule says 8's typically lead to 2's so the 78 opens the door to 82. The 22-month rally is long in the tooth. Considering the pop on tap today, and the negative divergence in place or about to finalize, HD can be considered as a short candidate from above 80. However, considering the frequency of disasters these days, where everyone needs to run to HD and LOW after the storm clouds subside, there are likely better short candidates to focus on and HD is probably best ignored at this point. If on the long side enjoying the ride higher, it is probably best to take profits and walk away. 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.