Well we got our exit signal on our Home Depot position today. It is still very close to the key support areas, so this still may recover as they announce earnings for the quarter this coming week (Tuesday, before market open).
The Relative Strength trend has been weakening recently and this week price confirmed the breakdown failing the 20 WMA and then closing just below key uptrend support. We may have been able to give this a little room, but after the run we have had in the position year to date, I would rather acknowledge the signal and just reenter the position should it turn around from here. You always can get back into a position once you sell, its not like the stock disappears and you are not allowed to buy it back. So we will continue to watch with an interested eye as to how it handles the news event this week and whether it can retake its key support levels.
What troubles me the most here is the fact that while being quite oversold and testing such a key level that price could not stage some kind of bounce today. It attempted to rally but then saw consistent sell pressure throughout the rest of the session and confirmed yesterday's weakness. We will certainly keep this on the radar as the long term uptrend is still not unconfirmed, but the weakness we saw this week triggered our sell signals...Always follow your signals!
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