Home Depot Sliced Through its 50Day Moving Average on Slight Revenue Miss

Home Depot Inc.'s HD first-quarter earnings rose 27% as spring like weather in many regions stimulated exterior projects and spring-related tasks ahead of normal.  For the quarter ended April 29, Home Depot reported a profit of $1.04 billion, or 68 cents a share, up from a year-earlier profit of $812 million, or 50 cents a share. Sales increased 5.9% to $17.81 billion. Analysts expected earnings of 65 cents a share on $17.96 billion in revenue. Same-store sales rose 5.8%, and climbed 6.1% domestically.

The stock price gapped lower on the open but finished off the lows of the trading session.  Price action sliced through the 50-day moving average which has been solid support for more than 6-months.  Support is now seen near the 100-day moving average which coincided with today's session lows.   Price action will likely consolidate in a range between the 100-day moving average near $47.40 and the 50-day moving average near $50.30.  Target resistance on a break above $50.30 is the recent highs seen near $53.

The RSI (relative strength index), which describes over-bought and over-sold levels, is printing near 34, which is the low end of the neutral range.  During the last six months, the RSI has remained above oversold levels.

The MACD (moving average convergence divergence index), is printing a negative index number near -.39.  The index level is the largest negative index point seen in the past year.  The MACD created a sell signal in mid May, where the spread (the 12-day moving average minus the 26-day moving average) crossed below the 9-day moving average of the spread.  Volume on HD increased substantially, moving above the 50-day moving average of volume.