The rally is nearly linear for over a year (note the tight regression and the 60% rise in price) and you can clearly see the bulls have had their party for a long time now.
It is astounding how HD has refused to go down along with the other homebuilding stocks and lumber prices and the financial engineering of repurchasing shares to keep investors gobbling up shares seems to have created "disregard" and a situation where there is much more risk to the downside than to the upside for HD .
Note how corrections have occurred once HD has gained 20%in 63-days time (one quarter of a year). The price is action is indicative of shareholder churning, likely from long term holders taking profits.
I view a 10% drop as more than 60% likely from my perspective. I have no position in the shares one way or the other, but will be considering my trade levels and options.
RISK = 3 average daily trading ranges (11 day average). REWARD = 5 average trading ranges or a break of 72 visible and obvious support.
Tim 3:57PM EST Monday, August 5, 2013