HD - Great stock with high dividends! Buy and thank me later

11 mar 2021We have a clean 5 wave impulsive move from the March 2020 low to August, followed by a clean 3 waves correction.

Classic chartist among you can see a clean Bull Flag.

I will maintain my bullish outlook as long as price doesn't close below 247!

Trade it according to your own methodology.
Personaly I'm already positioned and will look to add a bit on a pullback and once price breaks above the channel.

My targets are 325 at first, followed by 380 and 500 next but it will probably take some time before reaching that level.
Anyhow, Risk/Reward is a good 1/2.5 if buying now and going for the first target only, so I see no reason not to look to buy this stock.

15 mar 2021

Commento

Price consolidated.
Classic chartist call that a Bullish Flag
Overlay the Elliott Wave analysis over it along with some key Fibonacci levels and you get a quite convincing level from where price could bounce.

In this case,from March to August, price made a clean 100% rally.
Over the next six months as you say, it consolidated, just stayed sideways and retraced just 23.6% of the prior rally.
23.6% is a bit shallow for a wave 2 or B retracement I have to admit.

But, FIY, the EW theory tells us that after an impulisve rally, price often retraces back to the previous wave (iv), which it did perfectly in this case at 246.

Along that guideline, we have the fact that the consolidation can be counted as a 3 waves correction, in this case, a Flat correction.
Meaning wave A is 3 waves down from the highs, followed by a wave B retracing more than 90% of wave A and lastly a 5 waves move lower for wave C
(can't be seen clearly on this time frame, you have to go down to a smaller TF like 30min to see it)

Mesuring the Fib ratios we can see that wave C is equal to 127.2% of wave A, which is normal for a Flat correction. That level is at 248.

You can do this for the subwaves of wave C too and see that you get the usual termination point at 245 !

Another thing you have to know and it's the primary reason why I was looking for a reversal higher, is that Triangles (wave B here) precede the last actionary wave in the pattern of one larger degree!
Simply put, it signals that the end of the Flat ABC correction here is coming after one more move to the downside, which gives us a big reason to look for a reversal point.

So, in conclusion, we have a reason to look for a reversal (Triangle wave B) and we have a convincing support zone where to look for a bounce (245-248 zone).

14 apr 2021

Commento

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