On better than expected earnings, retail stock Home Depot (HD) gapped higher, breaking to all-time highs through a ceiling of resistance.
Let’s take a look at the breakout and note how far Home Depot has traveled in a short amount of time.
Here’s the Daily Chart with the Breakout:
Shares actually broke free of a resistance level – a Symmetrical Triangle Price Pattern – above $ 82.00 per share and continued the bullish impulse into the $ 84.00 level.
Today’s pre-market earnings boosted shares above the breakout into a trending impulse well above the $ 84.00 prior high level.
Let’s pull the perspective back to get a sense of what’s happened previously chart the strength of the current trend:
Pay close attention to the “Rounded Reversal” pattern from 2008 to the early 2012 breakout which set the stage for the current consolidation (sideways move) from 2013 to present.
Shares broke the horizontal resistance into “Open Air” and may continue impulsing higher as a result of bullish money coming in (as bearish short-sellers buy-back to cover losing positions).
This is a quick, ‘flash’ analysis of the potential breakout opportunity so be sure to study trade opportunities (pullbacks) that may develop for Home Depot shares.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade