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Today, we’re opening a new bullish trade on Home Depot (HD). With the stock market rebounding and the yield on the 10-year U.S. Treasury dropping to an all-time lows, the fundamental landscape is set up perfectly for HD.

Record-low yields on the 10-year Treasury are going to be a shot in the arm for the housing sector. Low yields mean low interest rates on mortgages, and low interest rates on mortgages mean we are likely to see more home-buying, more remodeling and more mortgage refinancing — all of which are great for HD. The stronger the housing market, the more homeowners spend at HD.

HD has been a strong performer during the bullish market run that started in early 2009, and it is still outperforming the S&P 500. The recent pullback in the stock gives us an excellent opportunity to jump into a new bullish trade as the stock climbs back up toward its 52-week highs just above $137.50.

‘Buy to open’ the HD August 135 Calls (HD160819C00135000).

You can learn more about identifying price patterns and using them to project how far you think a stock is going to move in our Advanced Technical Analysis Program.

InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade and get 1 free month today by clicking here.