We’ve talked about the importance of stock picking in this market, and our Slingshot Trader portfolio is equally matched with bullish and bearish options plays. One stock we are long is Home Depot (NYSE:HD). We look at HD’s chart after a recent down day to show you why it’s relative strength and technical history make a great call option candidate.
You can see that it came down slightly, but we’ve still got a great pennant formation, and we anticipate that Home Depot is going to break up the through this pennant, which would give us a great continuation pattern and a continuation of the uptrend that Home Depot has been in for quite some time.
On the chart in the video, I zoom out quite a ways, and you can see just what a juggernaut Home Depot has been really since August 2011, when it bottomed out and continued to move higher and higher. So, as more people are buying homes, we have seen stabilization in the housing markets. That’s been helpful for Home Depot where people are fixing up their current homes. We anticipate that Home Depot is going to continue to be profitable as consumers in those markets consumer to spend money to fix up the homes they’re in or to fix up the homes that they are now buying at a better level than they have in years past.
Investor Place advisors John Jagerson and S. Wade Hansen 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 trade and get 1 free month today by clicking here.