Home improvement retailers Lowe’s and Home Depot are two such examples. In the case of the latter, today’s intra-day high of $43.60 touches price channel resistance on the daily, hourly and 5-minute charts.
On the daily chart (4 y D), the past days’ price action brings Home Depot into resistance from a significant price channel defined by the security’s five greatest price extremes from July 2009 to the present; it’s the yellow dashed line in the screenshot.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivBkP73wkKV5CC77iGSmI6v7dNpZa4CU9m3KLgrajlCiArqCQFz4ttO4OZ2JYFgXIOGJ8AQmATw2TjLzww9IZj5S5eYbxUuNPBzftzhn076ruZG0yueFnNRKeUgND5dwcjCCD0z-5IZso/s400/hd+4yd.jpg)
Also on the daily chart, the Price Oscillator indicator, defined here as the difference between price and the 200-day moving average, is only $0.95 below its 4-year high, indicating an over-bought market.
On the hourly chart (180 d 1h), the current rally brings HD price action to the resistance-edge of a price channel defined by the stock’s movement since August 2, 2011.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigIUOTrnVZCMYLjATfNrRSJfPiiGhCQDJLtldx2KYlP4yv704RHLC1ul9Zr94eMM7G4He_4rpvDx5M4_Q0-nfW943ph8Jktr-oplBhatKC1WrUgMZqFZzgNMrR6JUsGa4EbJr-njaBYN0/s400/hd+180d1h.jpg)
Price action looks particularly vulnerable due to the starkly decreased volatility between 20.12.2011 and the present. To be sure, seasonality (i.e. the holiday season) plays a significant part; yet, no matter the cause, such a lull and complacency very often precede a bearish turn of a market.
Finally, the five-minute chart (20 d 5m) confirms that, from an intra-day perspective on the last 2-3 weeks, today’s price action brought HD to the resistance-end of a price channel.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhhJSkjhIJwuvJayi2xqJrGrhb_XYOPcPvmILFu75V8WWhTp0z5iICEWg2BX3hShi46gTVjj7ygwKHWjtCbo0n1bB0otkdEnjWoczEXAiQFoG6pwE7cbMmyEd7DIV1xW6gr5UYsaZaSlKQ/s400/hd+20d5m.jpg)
Of course, the extrapolation of such analysis of Home Depot is probabilistic, as is any attempt at prediction of the markets. Anything can happen at any time; tomorrow, price can pierce upward through the resistance lines on all three chart time frames.
Nonetheless, the positioning of HD’s price action into resistance on a variety of time frames strongly suggests that, false upward breakouts notwithstanding, the next month or two might see bearish sentiment take command, at least temporarily.
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