Home Depot "Plunges" to Support

NYSE:HD   Home Depot, Inc. (The)
All media invokes sensationalism to get clicks and views to see their ads. Some really play into the doomer mindset of their readers/viewers by selecting stories that amplify the theme of the world/economy/dollar ending and that the next crash is right upon us! I've been reading these headlines every day for over a decade now and it's just the way modern journalism works. As a trader I aspire to cut through the noise and negative bias (and sometimes the positive bias) and ask the more objective question: "what does the price action suggest?"

Home Depot HD had earnings today and while the news was negative the overall long term trend (on the Weekly timeframe) has not changed. The key low of COVID and All Time High trend has defined most stocks for the last two years and may continue to define them for up to a decade. This past trend sets up a 50% Retracement level around 280.62 which Home Depot stock price has stubbornly held with an auction zone for a year of price action by now.

Digging down through the lower timeframes the price action sets up a potential low-risk post-earning trade. The price action of the open poked below the near term low but failed to follow lower.

What I would look for is price to hold today's opening action and NOT break the opening low. That sets up a stop for a reversal of this oversold condition while the broader price action on the Weekly is at a major Support.

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