Swing Trade Idea (HD) – September 5, 2024
Our bearish trade for Thursday, September 5th is Home Depot Inc. (HD) HD is part of the Consumer Discretionary Sector, which performed at 8.09% over the last month with HD underperforming relative to its sector at 4.19% over the same period.
As HD traded into an area of resistance to form a double top at $375 it is pulling back to lower levels with declining strength. This indicates that HD will likely continue lower over the duration of this trade with the next area of support at $340. We recommend playing a bearish Credit Spread that generates over 41% premium/width, which is an excellent return.
As a close, if HD were to trade above $375 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 above $16.56.
