Home Depot Inc. (HD) stock is flashing warning signs for investors, ending last week with a notable decline that has extended into pre-market trading. This persistent downward pressure suggests that the home improvement giant may face a challenging start to the new trading week. This article will break down the crucial data and key levels that every trader should be monitoring on Monday.
A Recap of Thursday’s Bearish Session
The trading session on Thursday, June 20th, was firmly controlled by sellers, erasing early optimism and establishing a clear downtrend for the day.
-
Closing Price: The stock finished at
1.75 (0.50%) for the day.
-
Failed Rally: Home Depot opened higher at $350.08 and briefly touched a high of $350.90. However, it was unable to sustain this level and spent the rest of the day in decline.
-
Close Near the Low: The stock plunged to a daily low of $345.80 and failed to mount a significant recovery, closing much closer to its low than its high. This indicates strong selling pressure into the close.
Pre-Market Data Reinforces Negative Sentiment
The bearish momentum from Thursday’s close appears to be spilling over. The provided data shows the stock trading in the pre-market at
1.18 (0.34%).
This is a critical signal for traders. The pre-market price is testing the low from the previous trading session ($345.80). A failure to hold this level at the market open on Monday could trigger a fresh wave of selling.
Key Levels to Watch for on Monday
The price action for Home Depot on Monday will be defined by its ability to hold support or break through resistance.
-
Critical Support Level: The most important level to watch is the low of $345.80. A sustained break below this price would confirm the continuation of the downtrend and could lead to further downside.
-
Key Resistance Levels:
-
The first line of resistance is the closing price of $347.03.
-
A more significant hurdle is the previous day’s close of $348.78. Bulls would need to push the stock above this level to signal a potential reversal of the negative momentum.
-
Will Home Depot Stock Go Up or Down on Monday?
Given the technical picture, the odds currently favor the bears.
-
The Bearish Scenario: The path of least resistance appears to be lower. The weak close, combined with the pre-market drop testing the prior day’s low, strongly suggests that sellers remain in control. A break below $345.80 is the key bearish trigger to watch.
-
The Bullish Scenario: For the stock to rally, buyers would need to emerge in force at the open, defending the $345.80 support level and driving the price back above $347.03. A move above the $348.78 resistance would be needed to invalidate the immediate bearish outlook.
Is It the Right Time to Invest?
Your investment strategy will determine how you approach Home Depot stock on Monday.
-
For Short-Term Traders: The current setup favors a cautious or bearish stance. Buying into a stock that is actively breaking down is a high-risk strategy. Waiting for the price to stabilize or for a clear break of the $345.80 support level (for a potential short position) would be a more prudent approach.
-
For Long-Term Investors: Home Depot is a blue-chip company with a healthy dividend yield of 2.65%. For those with a long-term horizon, this price weakness could present a more attractive entry point. However, it’s important to be aware that the stock could continue to decline in the short term before finding a bottom.
In conclusion, Home Depot stock is entering the week with clear bearish momentum. The critical test will be whether the $345.80 support level can hold. Traders should watch this level closely at the open to gauge the market’s direction for the day.
Disclaimer: This article is for informational purposes only and is based on the data provided in the image. It does not constitute financial advice. All investors should conduct their own research and consult with a financial professional before making any investment decisions.
