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The Home Depot, Inc. (HD)

Home Depot stock forecast: buy or sell

Close on Oct 23rd, 2020
$283 +0.65%
3 months performance
5.90%
Published: October 24th, 2020 - 4.59pm EDT

Home Depot stock outlook

  • After marking new highs on October 16, Home Depot closed yesterday at $283.00 just moving a 0.65%
  • The stock is configuring an uptrend pattern since last March, when it bottomed at $139.06. This rally marked a 103.51% gain
  • With the recent gains, Home Depot is approaching to new all-time highs again, that are now just 3.3% above the current trading
  • Bank of America and BofA Securities published strong buy ratings for Home Depot on Tuesday, with an average forecast of $350.00
  • The Home Depot, Inc. operates as a home improvement retailer.

Disclaimer:
The comments published in this article are personal and not recommendations for you to buy or sell shares. The author of this article does not have an understanding of the particular situations of the reader, his or her financial statements or what is in his or her best interest at any given time. All users should speak with their financial advisor before buying or selling any securities Thoughts are published for educative purposes only

Home Depot stock charts

Should I buy Home Depot stock?

Even if you are a experienced or a novel trader, best trading results come from using an investing strategy that never leaves to random or subjective opinions when is the best moment to buy or sell stocks. Trading strategies are meant for helping you in the decision process of what stocks to pick and when is the best moment to buy them. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best

Is $HD stock a buy?

Currently, Home Depot stock doesn't match any of these trading strategies, so our recommendation is not to buy now. This doesn't mean $HD will slide in coming sessions, or it will not rise higher. Simply, it doesn't match our recommended trading systems

Should I sell Home Depot stock?

"To sell or not to sell", if you are holding Home Depot shares?. Like when we have to buy shares, determining when is appropiate to sell is not a random decision, and we must adhere our own trading style. Our trading system selects very simple strategies to guide us on when is a good moment to sell a stock. Be aware that these strategies are not intended for shorting Home Depot stock

As a rule of thumb, you should never keep an investment that generates losses greater than those expected upon purchase. The moment to sell shares must always be ruled by the stop-loss (automatic or manual)

Is it time to sell Home Depot stock?

Currently, Home Depot stock doesn't match any of our preferred sell setups, so if you hold Home Depot stock and your operation is in profit probably is not time to sell now

Analysts' recommendations to buy or sell Home Depot stock

Brokerage firms and financial institutions post stock ratings based on their views of the market and the fundamental and technical situation of the analyzed stock. Unfortunately, the accuracy of these predictions is not very high, and certainly not a direct buy or sell signal

In the last month, 5 analyst ratings were published for Home Depot. General sentiment is bullish, with 5 out of 5 publishing positive forecasts

Home Depot ratings

Brokerage firmRating
Oct 5th, 2020
BNP Paribas Buy
Oct 5th, 2020
Exane BNP Paribas Buy
Oct 7th, 2020
Morgan Stanley Buy
Oct 20th, 2020
Bank of America Strong buy
Oct 20th, 2020
BofA Securities Strong buy

Technical analysis

Home Depot stock started an uptrend last March, and gained an amazing 103.51%. During this uptrend, the price provided some entry points on the breakouts. Latest low was in early September, when price bounced at $262.81. Like in all uptrends, price needs to rest and now price is moving in a range between $292.65 and $262.81

$HD at new Highs

Home Depot reached all-time highs (ATH) on October 16 at $292.65, and cleared the field for new highs as there are no further resistances. Previous highs were in late August

SMAs overview

Moving averages are simple tools for traders to measure stock direction. A moving average is calculated as the simple mean of the previous N periods (usually sessions). Usual time periods used for moving averages are 21 days, 50 days, 100 days and 200 days

HD SMAs chart

Supports and resistances

Market investors use supports and resistances as a way to find price points in the stock price action that may work as barriers, preventing the price of shares to move in certain direction. A support level is a level where the price tends to find support as it falls. Price is more likely to "bounce off" this level rather than break through it. Nevertheless, if the price breaks down this level, it will probably continue falling until approaching another support level. On the contrary, a resistance level is where the price may find opposition as it moves up. In the same manner, this means that the price is more liable to "bounce off" at this level, and if it finally breaches this level, it will rise easily until it hits the next resistance

The current resistance levels are:

  • R1: $291.41 (2.97% above)
  • R2: $292.65 (3.41% above)
  • The current supports are:

  • S1: $262.81 (-7.13% below)
  • S2: $257.93 (-8.86% below)
  • S3: $242.98 (-14.14% below)
  • Bollinger bands

    This is an indicator that was introduced in the 1980s by John Bollinger. It consists of three lines that are drawn superimposed on the price evolution chart:

    • The central band is a moving average, usually a simple moving average calculated with 20 periods
    • The upper band is calculated by adding to the value of the simple moving average 2 times the standard deviation of the moving average
    • The lower band is calculated by subtracting from the simple moving average 2 times the standard deviation of the moving average

    Since the price surpassed the upper band on October 13, the price corrected downwards by 2.67%

    HD RSI chart

    Relative strength index

    The Relative Strength Index is an oscillator-type indicator that track price movements to detect when the share or financial asset is oversold or overbought. Oscillator indicators, such as relative strength, are intended to indicate values in the range of 0-100. J. Welles Wilder introduced the relative strength indicator in the late 1970s and since then it has been widely used by traders

    The RSI dropped below the overbought level of 70 in late August after just crossing to the overbough zone for just one day (weak signal). The RSI reading yesterday was 52.05. Since then, Home Depot shares dropped a 2.55%

    HD RSI chart

    Earnings and financials

    In mid-August, The Home Depot, Inc. ($HD) posted EPS for fiscal second-quarter that slightly improved analysts' expectations. Quarterly EPS was $4.02 per share instead of $3.71. This quarterly report means an earnings surprise of 8.36%.

    This compares to earnings of $3.17 per share same quarter last year, so current EPS means an improvement of 26.81%.

    Home Depot ($HD) is hosting the quarterly earnings call on mid next November. Wall Street analysts estimate a per-share earnings of $2.95, that is a 26.62% lower than Q2.

    HD revenues and profits chart