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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."