Shares of Home Depot are under heavy pressure this morning. The stock is off over 3% following this morning’s Q3 earnings report. Despite solid results, increased guidance and an upgrade from Oppenheimer, $HD opened the session with a gap lower open. It was clear after yesterday’s weak action that more downside was likely. After today’s post earnings sell off we expect a retest of the 2018 lows soon.
$HD is now off over 8% from last week’s high. From the 2018 peak, set just eight weeks ago, shares are down nearly 20%. The 2018 lows, which held the April and October lows, are now within easy striking distance. This area, between $171.00 and $170.00, should be viewed as a major support zone. If $HD can begin to stabilize here a very low risk entry opportunity will develop for patient bulls. On the downside, a close below $169.00 will send a clear warning sign that a deeper pullback is on the way.
At time of publication we do not have a position in Home Depot