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7 Extreme Stocks to Trade in This Volatile Market

Home Depot

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Exreme: Overbought; RSI at 70.63

Nearest Resistance: N/A

Nearest Support: $41

Almost the exact opposite pattern is taking place in shares of home improvement retailer Home Depot (HD - Get Report). This stock has consistently bested analyst expectations this year, rallying nearly 20% since the start of January. More impressive is the stock's rally from its August lows, a substantial move that's still being confirmed by a similar uptrend in RSI. As long as that RSI uptrend remains intact, traders are getting a "buy" signal on HD.

Eventually, that uptrend will come to an end, however. When it does, it's not a sell signal for shares. Momentum is a leading indicator of price, which means that it can act as an "early warning system" for a stock's price. That said, the exit signal on Home Depot only comes from price itself.

With this week's breakout above $41, I'd be looking for a pullback that retests our newfound support level as an even better buying opportunity.

I also featured Home Depot, one of Cramer's 7 Stocks for Your Buy List, in " 5 Rocket Stocks Poised for Gains."
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EDMC $0.09 28.57%
CREE $28.46 -2.90%
HD $112.86 -1.30%
NRP $0.93 0.00%
PAA $15.90 -3.70%


Chart of I:DJI
DOW 15,591.63 -323.11 -2.03%
S&P 500 1,825.40 -26.46 -1.43%
NASDAQ 4,242.9880 -40.6040 -0.95%

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