Department store giant Macy's (M - Get Report) is forming the exact same setup right now. Just like Home Depot, Macy's has a horizontal resistance level above shares right now (at $41) and an uptrending support level to the downside. So here too, we want to see a breakout above $41 before jumping on board this trade.
It's valuable to think about how this pattern works in real terms -- after all, patterns like the ascending triangle don't work because of magic or geometry. Instead, it all comes down to supply and demand in the market. The resistance level at $41 is a price where sellers have recently been more eager to sell and take gains than buyers were to buy. But a breakout above that level indicates that all of the excess selling pressure at $41 has been absorbed by increasingly committed buyers.
That's why it makes sense to buy a breakout through a resistance level. Momentum has been tightening over the course of this pattern, a fact that also points to a possible volatility squeeze for Macy's. That means that a sharper move is likely when a breakout does happen, so it'll pay to keep a close eye on shares. In this name, the 200-day moving average has been a better proxy for support -- that's where I'd keep a protective stop if and when Macy's breaks out.