These Charts are being held together with lumber and nails: $HD and $LOW – July 15, 2021
HD SPY LOW WA
This is Scott with your Free Chart of the Day. I want to take a look at 2 charts that are being held together with lumber and nails. I am talking about the home improvement stores Home Depot ( NYSE: HD ) and Lowe’s ( NYSE: LOW ).
Now, while the SPY ( NYSEARCA: SPY ) is whipping around, a little extended, just a little choppy, Home Depot ( NYSE: HD ) and Lowe’s ( NYSE: LOW ) look pretty darn good today. You can see how we hit a high here in May, consolidated, broke under the 50-day moving average, and then got fixed right back up and have this nice little base above all of the major moving averages. We have support here on the daily chart at around 314.75 and a little bit of a sideways range here, just a little base around the key moving averages here.
So here’s what I want to see from Home Depot ( NYSE: HD ). I want to see a break out of this range above 324.40 and I want that move to come on higher than average volume. So we need a little pickup in volume and we need a move through there. If you were to take this trade I would want to have a stop right around this 50-day moving average. If we got a decisive close below the 50-day moving average that would invalidate the trade and I would want to take it off.
Now, on Lowe’s ( NYSE: LOW ) the chart looks pretty much the same. It hit a high in May, broke down below the 50-day. Then all of the sudden Bob the Builder comes out of nowhere and brings it back up above the 50-day moving average. This chart is a little sloppier but the moving averages are nice and stacked together. I like that convergence of the moving averages. The same kind of setup here, we have support right under the 50-day moving average. Resistance right around that level, just under 197.00.
So again, it’s the same kind of setup. I would want to see a move through 196.70 and have a stop right around that 191.00 level. But like I said, I like the fact that these charts are holding up pretty well considering the state of the market. And it’s really hard, in my opinion, to find these nice tight chart patterns when we are seeing a lot of other stocks just kind of break down, maybe they need some glue.
Keep an eye on Home Depot ( NYSE: HD ) and Lowe’s ( NYSE: LOW ) for some potential breaks of their current trading ranges, the levels are pretty clear.
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