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Swing Trade Idea (HD) – February 1, 2024

Our bearish trade for Thursday, February 1st is Home Depot, Inc. (HD). HD is part of the Consumer Discretionary Sector, that is trending lower and traded at -4.41% over the last week, with HD performing at 1.85% over the same period.

HD has become overbought after three months of bullishness. It found resistance at around $360 and is showing signs of weakness. As its relevant sector, as well as the larger market is pulling back from recent highs, we believe that HD will follow suit and do the same, with the next areas of support at $340 and $310.

As a close, if HD were to trade above $360 for multiple days, this would invalidate our analysis and we will consider cutting losses on the trade. We will also consider cutting losses on this options trade if the value of the vertical spread moves below $3.80.