Two Longer Term Plays: Home Depot and Hain Celestial
- Posted by Greg Harmon
- on November 30th, 2011
One more month to go and as we hit the end of November it is time step back and to reflect on the broader picture. For this I look at the monthly charts. Many stocks are either moving sideways, or are in strong trends but with their Relative Strength Index (RSI) getting toward extreme levels on this timeframe. But two names with clean monthly charts to consider adding to your long term account are Hain Celestial, $HAIN, and Home Depot, $HD. let’s take a look.
Hain Celestial, $HAIN
Hain Celestial, $HAIN, had a long rally from the Hammer reversal candle printed in February 2010 to the top in May 2011 before the pullback, running over $20. Since that pullback it has now broken above the resistance of the May 2011 top and is continuing higher. It is supported to the upside by a RSI that is bullish and rising but far from any extreme level, and a Moving Average Convergence Divergence (MACD) indicator that has reversed the move lower and is now increasing again. Further reinforcing the move up is the increasing volume. Closing the month at 37.34, it has a Measured Move (MM) higher to 50 or another 34% above the current price.
Home Depot, $HD
Home Depot, $HD, has also been stair stepping higher. Breaking the recent early 2011 highs it is running higher still. It has support of the RSI firmly bullish and rising and the MACD that is now crossed positive and starting to grow. The MM takes this name to 42.50 but it has also moved above the neckline of an Inverted Head and Shoulders pattern with a target of 55, a full 40% above the current price.
These long term charts can help provide clarity but they also require patience. You cannot buy wither of these stocks and expect the moves to be fulfilled in a straight line or over a one to two month period. Give the monthly charts a wider berth and look at them less frequently to adjust or stop out a trade.
If you want to know how I would trade this names or for more ideas and deeper analysis, use the Get Premium button above. As always you can see details of individual charts and more on my StockTwits feed and on chartly.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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