Home Depot Tries to Get Constructive Before CPIFew sectors are more sensitive to interest rates (and therefore inflation) than housing. With the major consumer price index due on Thursday, it’s a good time to consider industry heavyweight Home Depot.
First, the home-improvement chain rallied after the last two CPI reports were lower than feared. Will it react similarly to another positive number?
Next, you have the tight consolidation zone between roughly $310 and $322. Notice how prices attempted to break free of this range on Wednesday.
Third, the bounce followed a test of the 50-day simple moving average (SMA). That same moving average had a potential “golden cross” above the 200-day SMA about a month ago.
Finally, this chart includes our 2 MA Ratio custom script. It keeps the default settings of the 8- and 21-day exponential moving averages (EMAs). The most recent rally pulled the fast EMA above the slow EMA, a potential sign of short-term direction turning more positive.
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