Retail has been a tough call in 2016, in fact many of the biggest names like Home Depot and Lowes were brought down hard just this past fall. Some tough housing data coupled with potentially weak consumer trends had these stocks in a virtual tailspin. Hope Depot tagged its high in August and fell some 20% over the next three months. However, since the election and some ‘good feelings’ about the economy we have seen a resurgence in some of these big retailers – just in time for the holidays.
We see some interesting chart patterns taking hold in Home Depot following the bottom put in early November. A series of higher highs, higher lows mark the chart up but since early November the trajectory of moving averages has been positive. The MACD is now on a new buy signal, momentum is strong and there has been little chance to get on board this very strong trend.
Relative strength is impressive but we note these same numbers were tagged in the summer as the stock reached a climax peak. Something to watch out for, but perhaps after a brief pause this stock should be headed higher once again in early 2017.
