Current trend

Shares of The Home Depot Inc., the world’s largest home improvement company, have been falling for the fifth week, during which time the price reversed downwards from 328.12 (Murrey level [6/8]), broke into the lower part of Murrey’s trading range and tested 289.06 (Murrey level [1/8]), consolidation below which will allow the quotes to reach the area of 281.25 (Murrey level [0/8]), 273.44 (Murrey level [–1/8]) and 265.62 (Murrey level [–2/8]). The key “bullish” level is 304.69 (Murrey level [3/8]), supported by the middle line of Bollinger Bands, if it breaks upward, growth will continue within the central Murrey channel to the area of 312.50 (Murrey level [4/8]) and 320.31 (Murrey level [5/8]).

Technical indicators reflect the continuation of the downward trend: Bollinger bands reverse downwards, and the MACD histogram is increasing in the negative zone. A reversal of Stochastic from the oversold zone does not exclude an upward correction to 304.69 but is unlikely to change the current trend.

Support and resistance

Resistance levels: 304.69, 312.50, 320.31.

Support levels: 289.06, 281.25, 273.44, 265.62.

Trading tips

Short positions may be opened below 289.06 or after a reversal at 304.69 with the targets at 281.25, 273.44, and 265.62 and stop losses at 294.00 and 310.00, respectively. Implementation time: 5–7 days.